AUD/USD is off the lows but the signs aren't looking good
AUD/USD touched a low of 0.7251 earlier in the day
And currently trades around the 0.7280 levels. Given the backdrop of a risk-off mood in markets, it's no surprise to see the aussie fall behind but given what has been taking place AUD/USD is only down 0.3% on the day right now.
However, the somewhat resilience here isn't going to offer much help to the aussie in the bigger picture. Friday's close saw the pair post its lowest close since January 2017 and trading today sees the pair hold below the 0.7300 handle.
From a technical picture, that isn't a good sign and not only that, there isn't really any key historical support levels for the pair on the way down from hereon. The next key levels that I can point to are the 0.7200 figure level and the 0.7160 level - December 2016 low.
If buyers are not able to retrace the losses seen in the last two days in a move back above 0.7300, it would add to further conviction that the pair still has more declines to come before seeing any potential turnaround.
Add to the fact that the dollar index is running away above the 96.00 handle and the divergence between central bank policies. It's not really making for a convincing argument to go long right now.
Apart from that, aussie yields are hit once again as the risk-off mood as a result of Turkey continues to dominate the market:
The only bright spot for the aussie is that the fall in yields is also seen in Treasuries too and that is not exacerbating the divergence between US and Australia bond yields further in favour of US bonds:
Although, the fact that the spread is now at 28 bps in favour of Treasuries - and set to get wider as the Fed raises rates and the RBA stands pat - makes it a tough point to argue against further downside in the pair when even technical levels are supportive of a lower AUD/USD.