AUD/USD extends losses towards 200-DMA on poor China services

The AUD/USD pair extends its bearish bias into a second day this Friday and remains on track to book the worst weekly loss in eleven weeks, in wake broad based US dollar strength amid rising hopes of a March Fed rate hike.

The Aussie met through fresh supply following the release of downbeat Chinese services PMI data, which capped a minor-recovery seen in the spot from monthly lows struck previously at 0.7556. China Caixin China Services PMI: 52.6 (February) vs previous 53.1

On Thursday, the major witnessed a massive sell-off, dropping more-than 120-pips, after the greenback picked-up significant strength across the board in tandem with shorter-duration treasury yields, following the release of better-than expected US jobless claims data, which bolstered March Fed hike bets.

Focus now remains on the US ISM services PMI and a slew of Fedspeaks, including Yellen’s speech, which will provide fresh insights on the US interest rates outlook.

AUD/USD Levels to watch   

At 0.7553, the pair finds the immediate support located at 0.7542 (200-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7523/21 (Jan-mid lows/ Classic S1) and below that 0.7507/00 (Jan 27 low/ round number). On the flip side, the immediate resistance at 0.7583 (50-DMA) above which gains could be extended to the next hurdle located 0.7600/02 (round figure/ daily pivot) and 0.7507(classic R1/ 10-DMA).