AUD/USD reverses a dip to 0.7470 on credit outlook downgrade

The AUD/USD pair met fresh supply and gave up almost 60-pips in a knee-jerk reaction to the Australian sovereign credit outlook downgrade by S&P, before recovering some ground to re-take 0.75 handle.

AUD/USD heavy, below 0.7500

Currently, the AUD/USD pair drops -0.51% to 0.7485, retreating from session lows struck at 0.7468 some minutes ago. The Aussie’s recovery from near 0.74 barrier lost legs near 0.7540 region as the bears fought back control after the US ratings agency, S&P, revised Australian government bonds outlook to negative, from stable, while the current rating remained AAA.

The downgrade revision in the Aus sovereign credit outlook came in light of the political gridlock, which is predicted to have major impact on the budget.

The overnight rally in the AUD/USD pair also fizzled after the greenback turned higher against its major peers, while mixed sentiment in Asia also weighed on the higher-yielding currency AUD amid continued worries over Brexit fallout.

Markets now await the US ADP data due later today ahead of the key payrolls release due out on Friday for fresh incentives on the major.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7560 (daily R1) above which gains could be extended to the next hurdle located at 0.7600 (round figure). On the flip side, the immediate support located at 0.7457/54 (50 & 20-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7353 (50-DMA).