• Softer US bond yields providing some respite.
• Weaker commodities fail to lend any support.
The AUD/USD pair managed to rebound around 20-pips from session lows but seemed struggling to gain any follow-through traction
The pair extended last Friday's rejection slide from the 0.80 neighborhood and broke below 100-day SMA support, near the 0.7825-20 region, in reaction to perceived hawkish FOMC meeting minutes.
The pair subsequently dropped to sub-0.7800 level during the Asian session on Thursday, albeit found some support at lower levels. With the US Dollar holding on to its gains, a mildly softer US Treasury bond yields seemed to be the only factor providing some immediate respite for higher-yielding currencies - like the Aussie.
Further gains, however, remained capped amid a fresh wave of selling pressure around commodity space, especially copper, which tends to dampen demand for the commodity-linked Australian Dollar.
It would now be interesting to see if the pair is able to find any follow-through buying interest or the rebound turns out to a dead-cat bounce amid firming expectations about gradual Fed monetary policy tightening cycle through 2018.
Moving ahead, today's US economic data, highlighting the release of usual weekly jobless claims, might provide some short-term trading impetus ahead of Fedspeaks, later during the NY trading session.
Technical levels to watch
Any further weakness is likely to find immediate support near the 0.7775-70 region, (200-day SMA), which if broken might turn the pair vulnerable to accelerate the fall towards 0.7725 intermediate support en-route the 0.7700 handle.
On the upside, any meaningful recovery attempt is likely to confront fresh supply near the 0.7820-25 region (100-day SMA), above which a fresh bout of short-covering could lift the pair further towards 0.7860 supply zone.
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