AUD/USD flirting with 50-DMA support

The AUD/USD failed to build on upbeat Chinese PMI-led early gains and turned lower for the second consecutive day. 

Currently trading around 50-day SMA immediate support near 0.7630 region, the pair's retracement from session high could be attributed to weaker commodity prices, especially copper, which derives demand for commodity-linked currencies, including the Australian Dollar. 

Also collaborating to the mildly bearish sentiment has been the Core PCE Price Index, which rose 0.2% m-o-m in February and took the yearly pace beyond the Fed's 2% target for the first time since March 2012. The data provided a minor up-lift to the US treasury bond yields and was seen diverting some flows away from higher-yielding currencies - like the Aussie. 

Meanwhile, market seems to have largely ignored neutral comments from the New York Fed President William Dudley, noting that number of rate hikes remains data dependent but couple of more rate hikes in 2017 seems reasonable. 

Up next would be the release of Chicago PMI and Revised UoM Consumer Sentiment, accompanied by Minneapolis Fed President Neel Kashkari's scheduled speech at the Banking Law Institute. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "with the 1 hour chart indicating further slides ahead, as intraday advances were contained by a bearish 20 SMA, whilst technical indicators turned south within negative territory. In the 4 hours chart, technical indicators entered negative territory with limited downward strength, as the price develops below its 20 SMA, in line with the shorter term perspective. Nevertheless, the pair needs to break below 0.7570 to gain bearish traction."