AUD/USD slides back closer to over 1-week lows, Fedspeaks in focus
| • A goodish pickup in the USD demand prompts fresh selling in the past hour.
• Weaker commodities offset sliding US bond yields and fail to stall the slide.
• Bears eyeing a sustained break below an ascending trend-line support.
The AUD/USD pair remained heavily offered through the early NA session and has now eroded a major part of previous session's modest recovery gains.
A fresh wave of US Dollar buying interest emerged in the past hour or so and has been one of the key factors exerting some downward pressure on the major. Adding to this, weaker commodity prices, especially copper, further dented sentiment surrounding the commodity-linked Australian Dollar and collaborated to the pair's heavily offered tone.
Meanwhile, the ongoing slide in the US Treasury bond yields, which tends to benefit higher-yielding currencies - like the Aussie, did little to lend any support and stall the pair's fall back to over one-week lows touched yesterday.
From a technical perspective, the 0.7800-0.7790 region marks a short-term ascending trend-line support, which if broken should pave the way for an extension of the pair's rejection slide from the 0.8800 neighborhood set last week.
Several Fed officials are lined up to speak on Friday and traders will closely scrutinize their comments in order to get some fresh clues over the central bank's near-term monetary policy outlook, which might eventually provide some fresh impetus on the last trading day of the week.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes, “the downward potential is limited, as the pair bounced from the mentioned low to the current 0.7830 region, holding above a strong Fibonacci support around 0.7820, but further gains are not yet clear, as in the 4 hours chart, technical indicators remain within negative territory, although gaining ground, while the 20 SMA maintains a strong bearish slope above the current level. Above 0.7860, yesterday's high, the pair has scope to extend its advance up to the 0.7890 a strong Fibonacci resistance, with sustainable gains beyond this last required to confirm a bullish continuation.”
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