AUD/USD off lows, still weaker around 0.7900 handle

The AUD/USD pair came under some intense selling pressure on Friday and tumbled below the 0.7900 handle, albeit has managed to recover around 25-pips from session lows.

The pair plunged around 85-pips and was being weighed down by dovish remarks by the RBA Deputy Governor Guy Debelle, dampening expectations of any monetary policy action in the near-future. 

   •  RBA’s Debelle: Rising AUD is complicating the economy's adjustment

Today's slump followed yesterday's volatile swing, from the key 0.8000 psychological mark to 0.7900 neighborhood and subsequent recovery back to mid-0.7900s, and now seems to indicated that the pair might have topped out in the near-term. 

The selling pressure, however, seems to have abated and the pair has now recovered back above the 0.7900 handle amid the prevalent highly bearish sentiment surrounding the US Dollar. Meanwhile, a softer tone around the US Treasury bond yields also seems to have collaborated towards limiting further downslide for higher-yielding currencies - like the Aussie. 

In absence of any major market moving economic releases, a follow through corrective slide, primarily led by long unwinding pressure, now seems a distinct possibility.

Technical levels to watch

Sustained weakness below session lows support near 0.7875 level should extend the corrective slide towards 0.7830-25 horizontal support en-route the 0.7800 handle. On the flip side, any up-move now seems to confront strong hurdle near 0.7955-60 region, above which the pair is likely to make a fresh attempt towards reclaiming the 0.80 handle.