AUD/USD still sinking following FOMC, breaks 0.78 handle in Asia session

• AUD/USD extends drop on Dollar boost.
• FOMC, bond yields driving USD higher.

AUD/USD is continuing to sink following Wednesday's drop, breaking past the 0.7800 barrier heading into the Tokyo open and currently testing 0.7790.

The Aussie took a header on Wednesday following the FOMC Minutes that sent the Dollar driving higher across the board. With the FOMC's increased projections for growth and inflation within the US economy driving up bond yields to record highs, The US Dollar soared, sending AUD/USD tumbling as the bearish trend looks set to continue.

The Reserve Bank of Australia (RBA) continues to be stuck between a rock and a hard place; with the Australian economy lagging behind global trends and data continuing to middle or disappoint, the RBA is set to stand pat on interest rates well into 2020 as the rest of the world gears up for rate increases in the face of rising inflation. The RBA's wait-and-see mode will remain firmly in place while the central bank waits for positive growth figures from economic releases. Australia will see Retail Sales figures late Thursday at 21:45 GMT; market forecasts anticipate a small bump in the numbers, with median estimates for the headline figure at 1.4% versus the previous reading of 0.2%.

AUD/USD Technicals

As FXStreet's very own Valeria Bednarik notes, "Technically, the pair is biased lower according to technical readings in the  4 hours chart as the price remains well below a bearish 20 SMA, while technical indicators lack directional strength, but hold within the negative territory. A steeper decline could be expected on a break below 0.7820, the 50% retracement of the December/January rally."

Support levels:  0.7820  0.7770 0.7730

Resistance levels: 0.7890 0.7930 0.7965