AUD/USD struggles near 4-1/2 month lows, below 0.6900 handle

   •  Growing RBA rate cut bets continue to weigh on the Australian Dollar.
   •  US-China trade tensions escalate further and add to the selling pressure.
   •  A subdued USD action helped limit the downside amid oversold conditions.

The AUD/USD pair struggled to register any meaningful bounce and held weaker below the 0.6900 handle, or 4-1/2 month lows through the early European session on Friday.

The pair remained under some selling pressure on the last trading day of the week and added to its recent heavy losses amid growing expectations for an interest rate cut by the Reserve Bank of Australia, especially after Thursday's softer domestic employment data.

This coupled with reports, saying that China is no longer interested in trade talks with the US, further fueled concerns over a full-blown trade war between the world's two largest economies and dented the already weaker sentiment surrounding the China-proxy Australian Dollar.

Meanwhile, the recent escalation in the US-China trade tensions has been weighing on investors' sentiment, which further collaborated towards driving flows away from the perceived riskier currency - Aussie and did little to stall the ongoing slide to the lowest level since early-January.

However, a subdued US Dollar price action, amid some renewed weakness in the US Treasury bond yields, seemed to be the only factor that helped limit any further losses, at least for now amid highly oversold conditions and ahead of Australian federal election on Saturday.

Technical levels to watch