AUD/USD too much too soon, demand faltered ahead of 0.80 psychological handle

Currently, AUD/USD is trading at 0.7913, down -0.33% on the day, having posted a daily high at 0.7953 and low at 0.7898.

AUD/USD gains overnight up to 0.7950 fell shy of previous highs through 0.7960 and the 61.8% fibo of 0.8066/0.7808 at 0.7962. The Aussie was mostly supported on AUD/JPY demand overnight that finally expelled the bid in late Asia with a resurgence of the greenback.  

AUD & NZD: Too high, too fast - HSBC

Howvere, AUD/USD stabilised in the European afternoon at 0.7940 before further selling down to the aforementioned lows as the greenback gained further across the board, all on the back of fresh chatter about the likeliness that Trump could be re-assessing his tax reform plans. US data, albeit second tier, has also lifted the spirits on Wall Street today and created demand for the greenback. However, copper and iron ore remain positive, so far, and that should stay supportive for the major commodity currency.

All eyes are the Jackson Hole and speeches from both ECB and Fed goveners, (Why the dollar could be the big winner from Jackson Hole).

AUD, NZD, CAD under pressure on Fed tightening prospects – Danske Bank

AUD/USD levels

While capped before the July 20 high at 0.7991, guarding 0.8065 and the 0.8162/66 May 2015 peak ahead of 0.8295 January 2015 high, Valeria Bednarik, chief analyst at FXStreet explained that the short term picture is modestly bearish. 

"In the 4 hours chart, technical indicators have turned lower, entering bearish territory but with limited downward momentum, whilst the price is now below a flat 20 SMA. The downward potential will likely increase on a break below 0.7870, the immediate support, favoring then a retest of this month low at 0.7807," argued Bednarik. 

Analysts at Commerzbank note that below the 0.7814/08 current August low and support line lies good support at 0.7763/41. "It is where the February and March highs meet the 55-day moving average," they explained.