AUD/USD holds in neutral territory, just below 0.79 handle

The AUD/USD pair failed to sustain early up-move beyond the 0.7900 handle and turned lower, albeit has managed to recover few pips from session lows touched in the past hour.

A goodish US Dollar recovery, always backed by a modest uptick in the US Treasury bond yields was seen weighing on higher-yielding currencies - like the Aussie. Adding to this, the prevalent risk-off environment, as depicted by weaker sentiment around European equity markets, was also seen driving flows back towards the greenback. 

Despite the early fall, the pair has managed to hold its neck just above 3-week lows touched in the previous session as investors seemed reluctant to initiate aggressive bets ahead of the RBA Governor Philip Lowe's scheduled speech during early Asian session on Friday. 

In the meantime, today's US economic docket, featuring the release of weekly jobless claims and PPI print, would be looked upon for some short-term trading opportunities, while the key focus would remain on Friday's US CPI print, which would influence Fed rate hike expectations and eventually drive the USD in the near-term.

Technical levels to watch

Immediate support remains near the 0.7855-50 region, below which the pair is likely to accelerate the fall towards 0.7820 level ahead of the 0.7800-0.7790 support. On the upside, any up-move might continue to confront some fresh supply near 0.7910 level, which if cleared has the potential to lift the pair back towards 0.7965-70 horizontal resistance.