• The USD manages to recover early lost ground and prompts some fresh selling.
• Weaker copper prices/risk-off mood exert some additional downward pressure.
The AUD/USD pair stalled its intraday attempted recovery ahead of the 0.7100 handle and might now be headed back to the lower end of its daily trading range.
The US Dollar reversed an early European session dip and is now looking to build on its momentum beyond the 96.00 mark, which eventually turned out to be one of the key factors exerting some fresh downward pressure on the major.
Adding to this, a negative tone around copper prices undermined demand for commodity-linked currencies. This coupled with the global flight to safety further benefitted the greenback’s safe-haven appeal and collaborated towards driving flows away from perceived riskier currencies - like the Aussie.
It would now be interesting to see if the pair continues to find some support at lower levels or finally breaks through the 0.7050-40 important support amid persistent US-China trade war fears, which has been denting sentiment surrounding the China-proxy Australian Dollar.
In absence of any major market moving economic releases, the pair remains at the mercy of the broader market risk sentiment and the USD price dynamics ahead of Atlanta Fed President Raphael Bostic's scheduled speech later during the US trading session.
Technical levels to watch
The 0.7050-40 region, 32-month lows, might continue to act as an immediate support, which if broken might turn the pair vulnerable to accelerate the fall further towards testing the key 0.70 psychological mark.
On the flip side, the 0.7085-90 region now seems to have emerged as an immediate hurdle and is followed by the 0.7115-20 area, above which the pair is likely to aim towards testing the 0.7150-60 supply zone.
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