Oct 17, 2017 04:14 PM

AUD/USD slides to fresh session lows amid surging US bond yields

The AUD/USD pair stalled its early European session modest recovery move near 0.7860 level and refreshed session lows post-US import price data. 

The latest release of US import/export price index data for September showed how sensitive the market is to inflation data. Hence, a sharp uptick in the US Treasury bond yields provided a minor boost to the already stronger US Dollar and attracted some fresh selling pressure around higher-yielding currencies - like the Aussie. 

   •  US: Import prices rise 0.7% in Sept on higher fuel prices; export prices increase 0.8%

Adding to this, a profit taking slide in copper prices was further seen weighing on commodity-linked currencies and further collaborated to the pair's slide to fresh session low, near the 0.7830 region.

Next on tap would be the release of US industrial production data, which along with a scheduled speech by Philadelphia Fed President Patrick Harker would be looked upon for some short-term trading impetus. 

Technical levels to watch

A follow through selling pressure has the potential to continue dragging the pair towards 100-day SMA support near the 0.7800 handle, below which the fall is likely to get extended towards its next major support near 0.7750 area.

On the upside, recovery attempts back beyond mid-0.7800s might continue to confront some fresh supply near 0.7885-90 area, which if clear could lift the pair beyond the 0.7900 handle towards 50-day SMA hurdle near the 0.7910-15 region.