AUD/USD struggling near 4-month lows, trying to defend 0.74 mark

Following yesterday's sharp slump, the AUD/USD pair remained under some selling pressure and refreshed multi-month lows, albeit has managed to hold its neck just above the 0.7400 handle.

Today's disappointing release of Australian trade balance data and China Caixin Services PMI did little to stall the pair's ongoing slide to the lowest level since Jan. 11. According to the data released on Thursday, Australia's trade balance for March shrunk to AUD 3107 billion from previous month's AUD 3574 billion and was also lower than AUD 3250 billion expected. Meanwhile, China's Caixin services PMI came in at 51.5 for April, down from 52.2 in March, while the composite PMI dropped to 51.2 in April from 52.1 previous. 

Adding to this, a follow through up-move in the US treasury bond yields, following Wednesday's perceived hawkish FOMC monetary policy statement, further collaborated to the offered tone surrounding higher-yielding currencies - like the Aussie. 

Even a modest recovery in copper prices, and RBA Governor Lowe's comments, failed to lend any immediate respite, with the pair turning out to be one of the worst performers in the past couple of days. 

Traders now look forward to the US economic docket, featuring - weekly jobless claims, Prelim Nonfarm Productivity and Unit Labor Costs for the first quarter of 2017, along with Trade Balance and Factory Orders data, due later during the NA session for some fresh impetus.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the decline came after another failed attempt to break above a daily descendant trend line coming from late March highs. Intraday, and according to the 4 hours chart, the rally seems overextended, as it has been a straight decline from the daily high of 0.7545, although technical indicators maintain their sharp bearish slopes within oversold territory, suggesting that further slides are likely."