The AUD/USD pair turned sharply lower during early European session and reversed around 45-pips from two-month highs resistance around 0.7630-35 region.
The pair's latest leg of sharp fall over the past hour or so could be attributed to the news headlines that Moody's downgraded long-term credit rating on the big four Australian banks citing elevated risks in the housing market. The news attracted some fresh selling interest around the Australian Dollar, dragging the major to fresh session lows near 0.7585 region.
The fall, however, turned out to be short-lived and the pair quickly recovered back above the 0.7600 handle amid softer tone around the US Treasury bond yields, which failed to lift the US Dollar but was seen lending support to higher-yielding currencies - like the Aussie.
Meanwhile, a positive trading sentiment around copper prices was also seen extending support to the commodity-linked currencies and helped limit further downslide for the major.
In absence of any major market moving economic releases from the US, scheduled speech by the Chicago Fed President Charles Evans would be looked upon for some fresh impetus.
Technical levels to watch
On a sustained break below 0.7585 level, leading to a subsequent drop below 0.7570-65 support, would turn the pair vulnerable to accelerate the slide towards mid-0.7500s en-route the very important 200-day SMA support near 0.7530 region.
Meanwhile on the upside, any up-move might continue to face some fresh supply near 0.7630-35 region, which if cleared is likely to lift the pair towards 0.7670-75 intermediate resistance ahead of the 0.7700 handle.
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