AUD/USD trades to the highs of the day at 0.7735 after having opened the day with a gap lower at 0.7709

The jitters sparked by the lira plunge led to a gap higher in the dollar against most major currencies, with the aussie bearing the brunt of an early move thanks to a drop in iron ore prices as well during Asian trading.

AUD/USD fell to a low of 0.7691 in the opening hour but has since recovered and is trading back to being little changed now at 0.7735.

AUD/USD H1 22-03

Sellers are in near-term control still as price action keeps below both key hourly moving averages @ 0.7752-53, so that is the key near-term level that buyers need to break back above to establish a more bullish bias this week.

For now, downside momentum remains somewhat limited around 0.7700 as the risk-off tone from earlier today has abated a little with the lira also observing a "calmer" period in European morning trade thus far.

USD/TRY has been trading around 7.80 to 8.00 after having opened the day with a whopping 15% gap higher at 8.35.

The recovery in AUD/USD also signifies that the broader dollar strength earlier today has eased a little and that is keeping major currencies little changed in general.

The market will still keep an eye on developments in the lira in case the volatility sparks another meltdown and that may see potential contagion among emerging markets.

Otherwise, the focus should shift back towards the bond market over time with risk trades taking things in stride today as 10-year Treasury yields are seen lower by 4.6 bps at 1.675%. As such, Nasdaq futures are up by 0.7% at the highs.