AUD/USD remains on the defensive below 0.6900 handle

The AUD/USD pair extended the overnight pullback from the 0.6925-30 supply zone and is currently placed near the lower end of a one-week-old trading range.
 
As investors looked past Tuesday's not so dovish RBA decision, a strong follow-through pickup in the US Dollar demand kept a lid on the pair's attempted intraday positive move, rather prompted some fresh selling at higher levels.

Trade optimism might help limit the downside

The already stronger Greenback got an additional boost after a survey on the US service sector – ISM Non-manufacturing PMI – rose to 54.7 in October and showed that business sentiment improved from a three-year low in September.
 
The pair finally settled with modest daily gains and witnessed some follow-through weakness on Wednesday amid the prevalent cautious mood, which tends to benefit the USD's relative safe-haven status against its Australian counterpart.
 
However, growing optimism over a possible US-China trade deal later this month continued lending some support to the China-proxy Aussie and helped limit deeper losses, helping the pair to hold just above the 0.6875 horizontal support.
 
Hence, it will be prudent to wait for a sustained break through the mentioned support before confirming that the recent bounce from multi-year lows has run out of the steam and positioning for any further near-term depreciating move.
 
In absence of any major market-moving economic releases from the US, a scheduled speech by the Chicago Fed President Charles Evans will be looked upon for some short-term trading impetus later during the early North-American session.

Technical levels to watch