AUD/USD Review: Struggles near 20-month lows, remains vulnerable

   •  The global flight to safety continues to drive flows away from perceived riskier currencies.
   •  Weaker commodities further dent sentiment surrounding commodity-linked Aussie.

The AUD/USD pair managed to close the weekly bearish gap, albeit struggled to make it back through the 0.7300 handle.

A steep decline in the Turkish Lira sparked concerns about a possible contagion into other markets and triggered a global wave of risk-aversion trade. The global flight to safety boosted the US Dollar's safe-haven demand and was seen as one of the key factors driving flows away from perceived riskier currencies - like the Aussie. 

Adding to this, a weaker tone around commodity space, especially copper, dented the already weaker sentiment around the commodity-linked Australian Dollar and further collaborated to the pair's weaker tone near the lowest level since Jan. 2017.

It would now be interesting to see if the pair is able to attract any buying interest at lower levels or continue with its bearish trajectory amid absent market moving economic releases at the start of a new trading week. 

Technical Analysis

The pair has week confirmed a bearish break below a near-term trading range, held over the past eight weeks or so. With short-term indicators still far from being in oversold territory, a follow-through weakness, led by some fresh technical selling now looks a distinct possibility.

The 0.7240-35 region is likely to act as an immediate support, which if broken might turn the pair vulnerable to break below the 0.7200 handle and head towards testing an important horizontal support near the 0.7160-50 region, held since May 2016.