AUD/USD pares earlier losses to keep closer to flat levels now
The pair was keeping around 0.6820-30 going into European trading, before climbing to a high of 0.6874 as the dollar pared its earlier advance. But price action is now creeping back closer to flat levels around 0.6850 levels to start the session.
All of this comes amid the backdrop of a rout in equities yesterday followed by what seems to be a mild retracement in US futures so far today.
If anything, that tells us that the market isn't quite settled on what to make of the decline yesterday just yet. And I reckon we won't get much hints until US trading later.
But we can at least focus on the technical levels to try and make sense of the situation.
For AUD/USD, price action is now resting under both its key hourly moving averages. That means the near-term bias in the pair is now more bearish. On the daily, the rejection at 0.7032 and failure to hold a firm break above 0.7000 stands out.
Meanwhile, the drag lower since overnight trading saw price test 0.6800 earlier in the day and the figure level is keeping sellers in-check for now alongside the 38.2 retracement level seen at around 0.6810 of the recent swing move higher.
For sellers, it will be important to keep price action under the key hourly moving averages - now seen at 0.6938-53 and also keeping below 0.6900 would set up a good platform to build on a further downside move in the sessions ahead.
As for buyers, more work needs to be done and 0.6800 is looking to provide a base for now to try and contest some near-term control as the market digests the risk/equities rout yesterday. But if that gives way, losses could accelerate quickly towards 0.6700 next.
