AUD/USD drops to fresh session low

The AUD/USD pair failed to build on to Tuesday recovery momentum from the very important 200-day SMA and resumed with its near-term slide to currently trade at a fresh session low level around 0.7535 region.

Broad based greenback strength, led by increasing market expectations of an eventual Fed rate-hike action, has been a key theme since the outcome of US presidential election. Moreover, Tuesday's upbeat US economic data further reinforced market expectations and is exerting selling pressure around higher-yielding currencies - like Aussie. Adding to this, the ongoing weakness in the commodity prices, especially Copper, is also denting demand for commodity-linked currencies and contributing to the pair's slide on Wednesday. 

Looking ahead, today's release of industrial production and capacity utilization rate from the US would be looked upon for short-term trading opportunities ahead of Australian jobs report during Asian session on Thursday. 

From Technical perspective, the pair's rebound from 200-day SMA on Tuesday lacked follow through momentum and is clearly indicative of consolidative phase before the pair resumes its near-term downslide. 

Technical levels to watch

Weakness below 0.7535 is likely to get extended towards 200-day SMA support near 0.7510-05 region, which if broken decisively would pave way for continuation of the pair's near-term corrective slide initially towards 0.7485 support and eventually towards 0.7450-40 strong horizontal support.

On the upside, 0.7550-55 area now becomes immediate resistance. Recovery above this immediate hurlde, leading to a subsequent momentum though 0.7565-70 resistance, has the potential to lift the pair towards 100-day SMA strong resistance near 0.7595-0.7600 region.