AUD/USD bulls manage to defend 0.70 handle, at least for now

The AUD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, above the key 0.7000 psychological mark through the early European session on Wednesday.

The pair extended the previous session's pullback from the 0.7045-50 supply zone, or 1-1/2 week tops, and was further weighed down by resurfacing US-China trade tensions, especially after the US President Donald Trump trashed hopes for a quick resolution to the prolonged US-China trade tensions.

Trump on Tuesday said that we have a long way to go before any deal and further added that he could impose tariffs on another $325 billion of Chinese imports. This coupled with a slight deterioration in the global risk sentiment exerted some fresh downward pressure on the perceived riskier, China-proxy Australian Dollar. 

On the other hand, the US Dollar remained supported by Tuesday's upbeat US retail sales data for June, which forced investors to scale back possibilities of an aggressive monetary policy easing by the Fed when it announces its latest monetary policy decision following the conclusion of a two-day meeting on July 30-31.

It would now be interesting to see if the pair can attract any fresh buying interest at lower levels or the current pullback reaffirms a strong barrier near mid-0.7000s, setting the stage for the resumption of the prior/well-established bearish trend.

Market participants now look forward to the US economic docket, featuring the release of housing market data - building permits and housing starts, due later during the early North-American session, in order to grab some meaningful trading opportunities.

Technical levels to watch