AUD/USD bounces off lows, but keeps the red below mid-0.7800s

   •  Resurgent USD demand prompts some fresh selling.
   •  Weaker commodities add to the downward pressure.
   •  Sliding US bond yields help limit deeper losses.

The AUD/USD pair maintained its offered tone through the early European session, albeit has managed to recover few pips from session lows.

The pair came under some renewed selling pressure on Friday and dropped to an intraday low level of 0.7814, eroding part of previous session's goodish recovery move amid resurgent US Dollar demand. Adding to this, weaker sentiment around commodity space, especially copper, exerted some additional downward pressure on the commodity-linked Australian Dollar. 

The pair, however, found some dip-buying interest at lower levels and was being supported by some renewed weakness in the US Treasury bond yields. With markets looking past Wednesday's hawkish FOMC meeting minutes, sliding US bond yields has been one of the key factors lending some support to higher-yielding currencies - like the Aussie. 

It would now be interesting to see if the pair is able to build on the recovery attempt or bears regain their dominant position amid relatively thin US economic docket. Nevertheless, the pair remains on track to post yet another weekly declines, marking its third in the previous four, as traders now look forward to Fedspeaks for some fresh impetus on the last trading day of the week. 

Technical levels to watch

Immediate resistance is pegged near mid-0.7800s, above which a fresh bout of short-covering could lift the pair back towards reclaiming the 0.7900 handle en-route 0.7940 supply zone. 

On the flip side, the 0.7800-0.7790 region might continue to act as an immediate support, which if broken might turn the pair vulnerable to break below the very important 200-day SMA and head towards testing its next support near 0.7760-50 area.