AUD/USD flirting with 2-month lows ahead of US macro data

Having faced rejection at 0.7500 psychological mark, the AUD/USD pair maintained its offered tone and has now dropped to a fresh two-month low.

Currently trading around 0.7460-65 region, the lowest level since mid-September, the pair failed to benefit from a broad based greenback retracement and built on Wednesday's break-down below the very important 200-day SMA support. Today's release of Australian jobs report provided little respite and the major extended its near-term weakening trend amid continuous slide in commodity prices, especially Copper, which is weighing on the commodity-linked currency - Aussie.

Moreover, with market participants already pricing-in a very high probability for an imminent Fed rate-hike action in December, investment flows are moving away from higher-yielding currencies and is further exerting selling pressure around the major.

Next on tap would be US macro releases that include - CPI, housing data (building permits and housing starts) and Philly Fed Manufacturing Index. Market participants will also pay attention to the Fed Chair Janet Yellen's testimony, which if reinforces market expectations of Dec. Fed rate-hike move would confirm the long-term up-trend of the US Dollar and trigger a fresh leg of weakness for the major.

Technical outlook

Yann Quelenn, Market Analyst at Swissquote Bank SA, notes, "AUD/USD's bearish momentum is growing after the break of the 61.8% and the 50% Fibonacci retracement. Hourly support given at 0.7421 (27/07/2016 low) is approaching. Expected to see further weakness."

He further writes, "In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view."

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