AUD/USD in search of a firm direction, holds steady above 0.78 handle

   •  Bulls seemed unimpressed by today’s upbeat Aussie/Chinese trade balance data.
   •  USD gains some respite from easing fears of a global trade war. 
   •  Weaker copper prices also fail to lend any support. 

The AUD/USD pair struggled for a firm direction and seesawed between tepid gains/minor losses through the early European session on Thursday.

The pair did gain some positive traction on the back of better-than-expected Australian/Chinese trade balance data but once again ran into some fresh supply near the 0.7840 region amid a modest US Dollar rebound.

Against the backdrop of yesterday's upbeat ADP report, receding fears of a global trade war helped ease the recent bearish sentiment surrounding the greenback. 

Meanwhile, a mildly softer tone around copper prices was seen denting demand for the commodity-linked Australian Dollar and further collaborated to the pair's retracement of around 15-20 pips from session tops. 

The pair, however, has managed to hold its neck above 100-day SMA, and the 0.7800 handle, and was being supported by weaker US Treasury bond yields, which tends to underpin higher-yielding currencies - like the Aussie. 

In absence of any major market moving economic releases from the US, the ECB-led volatility in the FX market might influence the USD price dynamics and help traders grab some short-term trading opportunities. 

Technical levels to watch

Bulls would be eyeing for a clear breakthrough 0.7840 level, above which the pair seems all set to surpass 0.7875-80 supply zone and head towards reclaiming the 0.7900 handle.

On the flip side, the 0.7800 handle is likely to protect the immediate downside, which if broken could accelerate the fall back towards mid-0.7700s en-route the 0.7725-15 strong support.