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AUD/USD hits fresh session tops, around mid-0.7100s and retreats

   •  The USD remains heavily offered amid worries of a possible inversion of the yield curve.
   •  The prevalent bearish sentiment around commodity space keeps a lid on the up-move.

The AUD/USD pair rallied around 65-pips from seven-week lows and is currently placed at the top end of its daily trading range, around mid-0.7100s.

The pair stalled this week's rejection slide from the 0.7200 area and found some decent support near the 0.7180 region amid some heavy selling around the US Dollar, which fell farther below the 96.00 handle, or multi-week lows. 

The Fed's projection for two rate hikes in 2019 led to a rise in the short-term US Treasury bond yields and global growth concerns drove investors towards the relative safe-haven assets, dragging yields on the long-dated government bonds lower. 

Narrowing spread between shorter-debt yields than longer-term ones revived worries of an inversion in the yield curve, which is seen as a reliable indicator of a recession down the road, and exerted some heavy downward pressure on the greenback.

Broad-based USD weakness prompted some aggressive short-covering move, though the prevailing bearish sentiment around commodity space and weaker equities kept a lid on any runaway rally for the commodity-linked/perceived riskier Australian Dollar.

There aren't any major market-moving economic releases due on Thursday and hence, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum through Thursday's trading session.

Technical levels to watch

Immediate resistance is now pegged near the 0.7165-70 region, above which the pair is likely to make a fresh attempt towards conquering the 0.7200 handle. On the flip side, the 0.7110-0.7100 region now seems to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the fall towards the 0.7050-40 intermediate support en-route the key 0.70 psychological mark.

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