AUD/USD off lows, but struggles to regain control over 0.76 handle
• Retracing US bond yields/USD extends support.
• Focus shifts to US GDP revision/Yellen’s testimony.
The AUD/USD pair extended its declines for the fourth straight day and dropped to a one-week low on Wednesday, albeit has managed to recover few pips.
The pair touched an intraday low level of 0.7583 but quickly rebounded back to the 0.7600 handle amid some renewed US Dollar weakness. With investors looking past the latest progress over the long-awaited US tax reforms bill, retracing US Treasury bond yields extended some support to higher-yielding currencies - like the Aussie.
Adding to this, fresh geopolitical tensions over the Korean Peninsula, coupled with a dovish assessment of the Fed Chair Designate Jerome Powell's testimony exerted some downward pressure on the USD and further collaborated to the pair's modest uptick from lows.
It, however, remains to be seen if the pair is able to build on its up-move beyond the 0.7600 handle or the broader bearish trend remains intact as investors now look forward to the first revision of the US Q3 GDP figures. Traders on Wednesday would also focus on the outgoing Fed Chair Janet Yellen's testimony before Joint Economic Committee of Congress.
Technical levels to watch
Momentum above the 0.7600 handle is likely to confront resistance near the 0.7615 level above which the pair is likely to aim towards clearing a major hurdle near the 0.7635-40 region.
On the flip side, weakness below 0.7580 level now seems to drag the pair back towards mid-0.7500s, below which the pair would turn vulnerable to head towards testing the key 0.75 psychological mark.