After an initial up-tick to 0.7720 level, the AUD/USD pair turned lower and extended previous session's retracement from 3-1/2 month peaks.
Currently trading 0.7685 region, the pair has now moved back to three week old familiar trading range and is fast approaching a short-term ascending trend-line support held since the beginning of Feb.
Despite of a softer tone surrounding the key US Dollar Index, and positive trading sentiment surrounding copper prices, a sharp fall in European equity markets seems to be driving flows away from riskier, higher-yielding currencies, including the Aussie.
The pair's inability to build on RBA Governor Phillip Lowe's comments-led minor up-tick provided first signs of bullish exhaustion and hinted towards possibilities of some near-term long-unwinding pressure.
From the technical perspective, follow through retracement and a decisive break below the short-term ascending trend-channel support near 0.7675 region would further confirm the onset of a near-term corrective slide.
Today's US economic docket, featuring the release of new home sales and Revised UoM Consumer Sentiment index might help traders to grab some short-term trading opportunities.
Technical levels to watch
Bulls would be disheartened if the pair failed to defend 0.7675 support below which the slide could get extended immediately towards 0.7650 support ahead of 0.7620-10 strong support. On the upside, momentum back above 0.7700 handle now seems to confront resistance near 0.7715 level, which if cleared could lift the pair back towards multi-month highs resistance near 0.7740 level, en-route Nov. daily closing highs resistance near 0.7760 area.
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