AUD/USD flirting with daily lows, still comfortable above 0.6800 handle

• Persistent trade uncertainty, softer domestic data exerted some fresh pressure on the aussie.
• A subdued USD demand, despite a pickup in the US bond yields, might help limit the downside.
• Investors now look forward to important US macro data for some short-term trading impetus.

The AUD/USD pair is currently placed near the lower end of its Asian session trading range, albeit has still managed to hold above the 0.6800 handle and 100-day SMA.

The pair failed to capitalize on this week's strong positive move to over three-week tops and came under some renewed selling pressure on Wednesday, snapping two consecutive days of winning streak in the wake of softer Aussie macro data. According to Australian Bureau of Statistics, Australia's GDP growth slowed to 0.4% during the three months to September as compared to the previous quarter's upwardly revised reading of 0.6% and worse than 0.5% anticipated.

Also read: NAB joins Australia's other 'big 4' in stepping up rate cut forecast

Aussie further weighed down by trade uncertainty

This comes on the back of persistent trade uncertainty and exerted some fresh pressure on the China-proxy Australian dollar. It is worth recalling that the US President Trump on Tuesday indicated that a trade deal with China may not come until after the 2020 US presidential election. Adding to this, the US Congress on Tuesday overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims and called for sanctions against some officials responsible.

The pair erased a major part of the previous session's positive move, albeit the downside remained cushioned, at least for the time being, amid a subdued US dollar demand. As investors continue to digest the latest trade developments, the USD bulls remained on the defensive, shrugging off a modest uptick in the US Treasury bond yields, and turned out to be the only factors that might lend some support to the major.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the recent corrective bounce might have already run out of the steam and positioning for the resumption of the pair's prior/well-established bearish trend. Moving ahead, market participants now look forward to the US macro data – ADP report and ISM Non-Manufacturing PMI – for some fresh trading impetus later during the early North-American session.

Technical levels to watch