AUD/USD bounces off lows, still in red below 0.7300 handle

   •  Resurfacing US-China trade tensions prompt some long-unwinding trade.
   •  Weaker copper prices further dent sentiment and add to the selling bias.
   •  Subdued USD price action helps limit further downside, at least for now.
 
The AUD/USD pair remained under some selling pressure for the second consecutive session and retreated farther from over 2-1/2 month tops, set last Friday.

The pair struggled to build on last week's goodish upsurge, with conflicting signals on the prospects for a breakthrough in the US-China trade dispute exerted fresh downward pressure on the China-proxy Aussie and prompted some long-unwinding on the first day of a new trading week. 

The commodity-linked Australian Dollar was further weighed down by a weaker tone around commodity space, especially copper. This coupled with the global flight to safety exerted some additional downward pressure on perceived riskier currencies - like the Aussie. 

Bullish traders seemed unimpressed by the latest RBA monetary policy meeting minutes, which showed that policymakers expect above-trend growth in 2018 and 2019, supported by interest rates at a record low level of 1.50%.

Meanwhile, IMF's comments on the Australian economy, saying that the balance of risks is tilted to the downside amid slower China growth/trade tensions, further collaborated to the pair's intraday slide to a session low level of 0.7268.

However, Fed rate hike uncertainty, especially after the Fed Vice Chairman Richard Clarida's dovish comments on Friday, continued undermining the US Dollar demand and helped limit deeper losses, in fact, helped the pair to rebound around 20-pips from daily lows.

Moving ahead, today's US economic docket, featuring the release of the US housing market, will now be looked upon for some short-term trading opportunities later during the early North-American session. 

Technical levels to watch

The 0.7300 handle now seems to act as an immediate hurdle, above which the pair is likely to make a fresh attempt towards clearing the 0.7335-40 supply zone. On the flip side, the 0.7270 region now becomes an immediate support to defend, which if broken could accelerate the slide towards 0.7235 intermediate support en-route the 0.7200 handle.