AUD/USD struggles near 1-week lows, around mid-0.6800s

The AUD/USD pair consolidated its recent slide to one-week lows and was seen oscillating in a narrow band, just below mid-0.6800s through the early European session on Wednesday.

The pair extended last week's sharp pullback from levels beyond the very important 200-day SMA and remained depressed on Wednesday, marking its third day of a negative move in the previous four.

Weighed down by a combination of factors

As euphoria from the US-China trade agreement faded, some follow-through US dollar buying interest was seen as one of the key factors exerting some pressure on the China-proxy Australian dollar.

The greenback remained well supported by the overnight release of upbeat industrial production, housing market data and some hawkish comments by Dallas Fed President Robert Kaplan.

Kaplan reiterated that interest rates will be kept on hold unless there is a drastic change in the US economic outlook and remained supportive of the bid tone surrounding the USD.

This coupled with the prevalent cautious mood around the global financial market further drove flows away from perceived riskier currencies, including the aussie, and added to the selling bias.

Meanwhile, the downside seemed limited, at least for the time being, amid absent relevant fundamental catalyst and thus, warrants some caution before placing any aggressive bets.

In absence of any major market-moving economic releases from the US, the market focus now shifts to the Australian monthly jobs report, due for release during the Asian session on Thursday.

Technical levels to watch