AUD/USD refreshes session low near mid-0.7900s

Haresh Menghani FXStreet

Having failed to move back above the 0.80 psychological mark, the AUD/USD pair drifted into negative territory and extended previous session's sharp pullback from fresh 26-month highs.

Currently trading around 0.7960 level, the pair surrendered early tepid gains and turned lower for the second consecutive session despite a modest US Dollar pull-back post yesterday's strong recovery. Even a subdued action around the US Treasury bond yields, which tend to benefit higher-yielding currencies - like the Aussie, failed to lend any support to the major.

• Dollar Index - Shallow recovery runs out of steam ahead of US GDP release

A softer tone around commodity space, especially copper seems to be one of the key factors weighing on the major. Meanwhile, yesterday's price-action clearly pointed to first signs of profit-taking and hence, long-unwinding pressure also seems to be collaborating to the pair's follow through retracement from the highest level since May 2015.

Investors now look forward to the next important US macro data - second quarter advance growth numbers, which would drive the pair during early NA session ahead of Minneapolis Fed President Neel Kashkari's speech later today.

Technical levels to watch

A follow through retracement below mid-0.7900s could extend the corrective slide further towards 0.7915-10 support area. On the upside, any recovery attempts might now confront immediate resistance near the 0.80 handle, above which the pair could make a fresh attempt to retest the 0.8050 region before resuming with its well established bullish trend.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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