AUD/USD extends rejection move from 200-DMA, now eyeing 0.75 mark

The AUD/USD pair stalled its two-day old recovery move and faced rejection at the very important 200-day SMA, now probing daily lows near 0.7515-10 band.

Earlier on Wednesday, the pair extended short-covering bounce and touched one-week high level of 0.7556 after RBA status quo. The pair, however, lost its upside momentum and a fresh bout of selling interest at higher levels clearly seems to indicate that the pair's near-term depreciating move might still far from being over.

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Meanwhile, the prevalent bearish sentiment surrounding commodity prices, especially copper, coupled with disappointing China Caixin PMI, seems to be a key factor weighing on the commodity-linked, China-proxy, Australian Dollar. 

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Also collaborating to the downslide is a modest up-tick in the US treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.

However, a subdued US Dollar price-action could lend some immediate support and collaborated towards limiting further downslide amid lack of fundamental drivers from the US economic docket. 

Technical outlook

Yuri Papshev, Trader & an Independent Analyst notes, "the return under the levels of 0.7535 (EMA200 on the daily chart), 0.7512 (EMA200 on the 1-hour chart) will confirm the downward dynamics of the pair AUD/USD. The breakdown of the support levels of 0.7475 (April lows), 0.7460 (the Fibonacci level of 23.6% of the correction to the fall wave of the pair since July 2014), 0.7435 (the bottom line of the descending channel on the daily chart) will raise the risks of return to the downtrend of the AUD/USD pair, which began In July 2014. The medium-term goal of this decline will be the level of 0.7155 (May and December minima of 2016).”