• Investors looked past today’s upbeat Aussie employment details.
• Resurgent USD demand triggers the initial leg of retracement slide.
• A slump in commodity space further aggravates the selling pressure.
The AUD/USD pair extended its sharp retracement slide and has now retreated around 90-pips from intraday tops, touched in the aftermath of stellar Aussie jobs data.
The pair once again failed to make it through the 0.7440 supply zone and the initial leg of retracement slide was triggered by resurgent US Dollar demand, which continued benefitting from upbeat economy outlooks from the Fed Chair Jerome Powell and the central bank’s Beige Book report.
This coupled with the ongoing slump in the metal space weighed heavily on the commodity-linked Australian Dollar and further collaborated towards aggravating the selling pressure.
The latest leg of sharp fall over the past few hours could also be attributed to some technical selling, following a decisive break back below the 0.7400 handle. Hence, a follow-through weakness, back towards recent lows, now looks a distinct possibility.
Technical levels to watch
The 0.7340 area might continue to protect the immediate downside, which if broken might turn the pair vulnerable to slide towards challenging the 0.7300 round figure mark. On the flip side, the 0.7400 handle now becomes immediate hurdle and is followed by a strong resistance near the 0.7440 supply zone.
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