AUD/USD drops to fresh three-week lows

The AUD/USD pair extended Wednesday's reversal from 4-week high and maintained its bearish bias for the third consecutive session.

Currently trading around 0.7335 region, testing 3-week lows, more hawkish than expected Fed outlook has been the key factor weighing on higher-yielding currencies - like the Aussie. With strong market sentiment swinging in favor of the US Dollar, the Australian Dollar even failed to gain any respite from Thursday's upbeat Australian jobs report. In fact, solid US economic data - CPI, weekly jobless claims and regional manufacturing indices, released on Thursday, provided an additional boost to the already stronger greenback and dragged the major to its lowest level since Nov. 21.

From technical perspective, the pair's recovery momentum from Nov. monthly lows failed to lift the pair beyond the very important 200-day SMA. Moreover, the pair has repeatedly faced rejections near 0.7500 handle and hence, seems more likely to resume with its prior depreciating move.

Later during NA session, US housing market data - building permits and housing starts, would be looked upon for some immediate respite.

Technical levels to watch

On the immediate downside, 0.7325 level is likely to act as immediate support below which the pair is likely to accelerate the slide towards 0.7300 round figure mark. On the upside, recovery above 0.7350 immediate hurdle might now face resistance at session peak level near 0.7370 level, which if cleared might extend short-covering bounce towards 0.7400 handle.