AUD/USD finds a minor support near mid-0.7900s
| • Worries over US tariffs weighing heavily on the Aussie.
• Sharp retracements in the US bond yields lend some support.
• A slump in copper prices might limit any meaningful bounce.
Bearish pressure surrounding the Australian Dollar seems to have eased a bit, at least for the time being, with the AUD/USD pair trying to stabilize just above mid-0.7900s.
The pair came under some intense selling pressure on Tuesday and retreated sharply from the 0.8030-40 supply zone amid reviving US Dollar demand. The Senate vote to re-open the US government triggered the initial leg of retracement from closer to last week's 4-month tops.
The turnaround accelerated further after the US slapped 'America First' tariffs on imported washing machines and solar panels, which sparked fears of a global trade war. The move was expected to heavily affect manufacturers in China and prompted aggressive selling around the China-proxy Australian Dollar.
However, a sharp retracement in the US Treasury bond yields helped limit further losses for higher-yielding currencies - like the Aussie. Meanwhile, the only supporting factor seems to have been negated by the latest leg of a slump in copper prices, which might now cap any meaningful recovery amid relatively empty US economic docket.
Technical levels to watch
A follow-through weakness below the 0.7940-35 immediate support now seems to accelerate the fall back towards the 0.7900 handle, below which the pair is likely to head towards testing its next support near the 0.7865 horizontal level.
On the upside, any recovery attempts might now confront fresh supply near the 0.800 handle and is followed by a heavy supply zone near the 0.8030-40 region. A decisive break through the mentioned hurdle should assist the pair to dart towards reclaiming the 0.8100 handle.
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