AUD/USD recovers early lost ground to 1-week lows but lacks follow-through

   “¢   The USD fails to preserve/build on the early uptick and helps bounce off lows.
   “¢   Weaker commodity prices/risk-sentiment keeps a lid on any further up-move.
   “¢   Traders now eye second-tier US economic releases for some short-term impetus.

The AUD/USD pair built on its steady intraday recovery from one-week lows and is currently placed at the top end of its daily trading range, around the 0.7170-75 region.

The US Dollar failed to preserve early gains, supported by weaker risk-sentiment and was seen as one of the key factors behind the pair’s goodish bounce of around 30-pips since the early European trading session.

Against the backdrop of dovish Fed expectations, concerns that a prolonged US government shutdown might begin taking a toll on the economy kept a lid on any meaningful up-move for the greenback.

The uptick, however, lacked any strong conviction and remained capped amid the prevailing bearish sentiment surrounding commodity space, which tends to undermine demand for the commodity-linked currency – Aussie.

Moving ahead, market participants look forward to second-tier US economic data – initial weekly jobless claims and Philly Fed manufacturing index for some fresh impetus.  

Technical levels to watch