The pair is now settling down a bit after some rather back and forth action in March trading. It looked like buyers were poised for a strong breakout, only to get their wings clipped following a reversal to the initial reaction to the US jobs report last month here. Since then, sellers slowly took over and regained more technical control. And now, we’re seeing that translate to some pressure close to the 0.6500 level since last week.

The 200-day moving average (blue line) at 0.6545 is a notable resistance point for now. Keep below and sellers will continue to stay poised in testing the 0.6500 level again. There is some added downside support around 0.6485-88 and that is preventing a steeper fall in the pair for now. But a break below that sets up a retest of the February low of 0.6442 next.

Those are the technical parameters in play as we look towards the days ahead.

In terms of key factors impacting the pair, the US jobs report will once again be the one to watch – similar to a month ago. That and broader market sentiment will factor into the dollar side of the equation in the coming sessions.

As for the aussie, there isn’t much to work with as this month will not feature a RBA policy meeting. On the data front, it is a bit of a dud as well unfortunately. As such, the aussie will be influenced by the overall risk mood and spillover sentiment from the Chinese yuan again.

USD/CNY had recently broke above the key 7.20 threshold for the year but is now consolidating a fair bit near 7.23. If Chinese authorities allow the yuan to slide a bit more, that will in turn also weaken the aussie at the balance.

This article was written by Justin Low at www.forexlive.com.