AUD/USD extends recovery from 100-DMA support

The AUD/USD pair staged a sharp recovery from 100-day SMA support and has now reversed majority of the losses recorded in the previous session.

Currently trading around 0.7580 region, the pair on Tuesday tested its lowest level since September 20 amid broadly stronger greenback led by increasing bets of an eventual Fed rate-hike action by the end of 2016.

Hence, investors will closely scrutinize today's release of minutes from the Federal Reserve's September monetary policy meeting in order to gauge the timing of next Fed rate-hike move with CME group's FedWatch Tool is currently pointing to over 60% probability of such an action in December. 

Today's release of Westpac Consumer Sentiment index for October, which rose sharply to 1.1% from previous month's 0.3%, provided additional legs to the pair's recovery led by a broad based retracement in the US Dollar, primarily on the back of a sharp rebound in the GBP/USD major. 

Technical levels to watch

Sustained momentum above 0.7585-90 (session high resistance) seems to assist the pair back towards 50-day SMA support break-point turned resistance near 0.7610 region. A follow through buying interest has the potential to lift the pair further towards 0.7630-35 horizontal resistance area.

Meanwhile on the downside, weakness below 0.7550 immediate support is likely to drag the pair back towards 100-day SMA support near 0.7530-25 region below which a fresh leg of depreciating move could drag the pair below 0.7500 psychological mark towards testing its next major support near 0.7465-60 region.