AUD/USD slides to fresh session lows, below mid-0.7800s

Haresh Menghani FXStreet

• The post-NFP USD rebound prompts fresh selling.
• An uptick in the US bond yields adds to the pressure.
• Aussie further weighed down by iron-ore price forecasts.

The AUD/USD pair traded with a negative bias on Monday and is currently placed at session lows, around the 0.7840-35 region.

The pair once again met with some fresh supply near the 0.7875 region and was being weighed down by an extension of the post-NFP US Dollar recovery move.

Despite a weaker-than-expected headline NFP print, the prevailing positive tone around the US Treasury bond yields underpinned the USD demand and was seen capping gains for higher-yielding currencies - like the Aussie.

The Australian Dollar was further weighed down by the latest iron-ore price forecasts by the Department of Industry, Innovation and Science, and a mildly softer tone around commodity-space.

Meanwhile, the price action seems to suggest a possible bullish exhaustion ahead of the 0.7900 handle. Hence, a follow-through long-unwinding pressure, leading to a subsequent weakness back below the 0.7800 handle, now seems a distinct possibility.

In absence of any major market moving economic releases, the pair remains at the mercy of US bond yield dynamics and the broader market sentiment surrounding the greenback.

Technical levels to watch

Immediate support is pegged near 0.7825 level, below which the pair is likely to slide back towards the 0.7800 handle before eventually dropping to 100-day SMA support near the 0.7780-75 region.

On the upside, the 0.7870-75 region now seems to have emerged as immediate resistance, above which the pair is likely to surpass the 0.7900 handle and head towards testing 0.7925-30 supply zone.

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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