AUD/USD off lows, but remains vulnerable below 200-DMA

After yesterday's brief pause, the AUD/USD pair came under some renewed selling pressure and broke below the very important 200-day SMA support to hit a four-week low level of 0.7532.

The release of lower-than-expected Caixin China Services PMI attracted some fresh selling pressure around the China-proxy Australian Dollar. Adding to this, persistent weaker sentiment surrounding commodity prices was also seen weighing on commodity-linked currencies, including the Aussie. 

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Against the backdrop of dovish RBA commentary on Tuesday, raising concerns over medium-term economic risks for the Chinese economy, overnight hawkish FOMC meeting minutes failed to assist the pair to build on previous session's tepid recovery move. 

However, a mildly softer performance by the US treasury bond yields seems to have lend some immediate support, with the pair recovering few pips from session low to currently trade just below mid-0.7500s.

Today's US economic docket features the only release of weekly initial jobless claims and would be looked upon for some short-term trading impetus. However, key focus would remain on Friday's closely watched US monthly jobs report (NFP), which would help investors determine the pair's next leg of directional move.

Technical levels to watch

Support below 0.7535-30 region (session low) is pegged at the key 0.75 psychological mark, which if broken now seems to trigger a fresh leg of downslide for the major initially towards 0.7475 horizontal support ahead of 0.7425-20 strong support.

On the upside, any recovery beyond 0.7560 level might continue to confront strong resistance near 0.7590 region (yesterday's high), above which a bout of short-covering has the potential to lift the pair towards 50-day SMA hurdle near 0.7630 region.