AUD/USD recovers after dumping in Tuesday's session

The AUD/USD is recovering from a tumble and trading near 0.7850 heading into the overnight session. Markets were shaken and the Dollar bounced late Tuesday after Trump announced the dismissal of his Secretary of State, Rex Tillerson. Trump has likely fired Tillerson after one-too-many rows with the President over foreign policy matters including North Korea, Iran, and China. Tillerson's departure is viewed by many as another ejection of sensible administration staff in favour of Trump's growing base of political hardliners.

The headliner for Tuesday was expected to be the US CPI data release, but market reaction was muted when the inflation figures for the US came out exactly at expectations. 

Australian data is mid-tier for Wednesday, with the only notable data point being the Westpac Consumer Confidence index, dropping at 23:30 before the Wednesday rollover. The previous reading came in at -2.3%, but market expectations are largely flat for Australia, with middling economic keeping the Reserve Bank of Australia (RBA) stuck in wait-and-see mode well into 2019 by most estimates.

China data may shake up the AUD/USD pair at 02:00 GMT Wednesday, when January figures for Chinese Retail Sales, Industrial Production, and Fixed Asset Investment all drop simultaneously, although Chinese sources are notorious for being late.

AUD/USD Technicals

According to FXStreet's own Valeria Bednarik, "Technically the pair is trading at the upper end of the last three weeks' range, and in the 4 hours chart, above a bullish 20 SMA and the 200 EMA, which skews the risk toward the upside, although technical indicators lost upward momentum and turned lower within positive territory while the pair remains unable to surpass the major resistance mentioned above. A clear break above it, however, should see the pair nearing the 0.8000 figure during the upcoming sessions."

Support levels: 0.7820 0.7775 0.7740

Resistance levels: 0.7890 0.7920 0.7955