AUD/USD erase majority of tepid recovery gains

A fresh bout of USD buying interest seems to have emerged, with the AUD/USD pair erasing majority of its tepid recovery gains to currently trade nearly unchanged around 0.7470-75 band.

The greenback continues to gain traction as markets seemed convinced that the Federal Reserve would eventually move toward hiking interest rates further in 2016, albeit with slim possibilities of such an action at its meeting on September 20-21. 

Fed rate-hike expectations coupled with a sharp drop in Consumer Sentiment data, released from Australia during early Asian session on Wednesday, is weighing on high-yielding currency - Aussie. 

In absence of any major economic releases, with the only scheduled release of import prices data from the US, the pair would continue to be driven by expectations over Fed’s next monetary policy action and the prevalent risk sentiment in equity markets.

Technical levels to watch

Immediate support is seen at 0.7442 (yesterday's low) below which the pair is likely to aim towards testing 0.7400-0.7395 support (200-day SMA region). On the upside, sustained move above 0.7480 (100-day SMA), and a subsequent move above session high resistance near 0.7500 psychological mark, seems to assist the pair further towards 0.7540-45 resistance.