AUD/USD consolidates daily losses, just above mid-0.7800s

   •  Tuesday’s late recovery turns out to be short-lived.
   •  A broadly stronger USD prompts some fresh selling.
   •  Renewed pickup in the US bond yields adds to the pressure.

The AUD/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow range around the 50-day SMA. 

The pair struggled to build on overnight late recovery move further beyond the 0.7900 handle and met with some fresh supply on Wednesday. The selling pressure remained unabated amid a follow-through US Dollar buying interest. 

This coupled with a goodish pickup in the US Treasury bond yields further exerted some downward pressure surrounding higher-yielding currencies - like the Aussie. 

Bears, however, have struggled to drag the pair decisively below 100-day SMA support and the pair, so far, has managed to hold above 4-week lows touched in the previous session.

In absence of any major market moving economic releases, comments by the New York Fed President William Dudley might influence the USD price dynamics and help traders grab some short-term trading opportunities.

Technical outlook

Valeria Bednarik, American Chief Analyst at FXStreet writes: “The AUD/USD pair retains its bearish stance according to technical readings in the 4 hours chart, as the intraday spike met selling interest around a strong resistance area, formed by the 200 EMA  and a bearish 20 SMA crossing below the larger. In the same chart, technical indicators have resumed their declines within bearish territory after correcting oversold conditions, also indicating downward pressure. Furthermore, the pair was unable to settle above the 38.2% retracement of its December/January rally around 0.7890, the immediate resistance area. The weekly low at 0.7835 is the immediate support, ahead of 0.7795 where the pair bottomed early January.”