AUD/USD plunges to nearly 7-month low

Having faded a tepid recovery bounce to session high level of 0.7258, the AUD/USD pair came under renewed selling pressure and has now broken below 0.7200 handle to a fresh six month low.

A weaker sentiment around commodity markets, especially Copper, is weighing heavily on commodity-linked currencies - like the Aussie. Moreover, growing expectation of faster US economic growth, in wake of aggressive fiscal spending by Trump administration, is further reinforcing the Fed's hawkish outlook for 2017 and driving investors away from higher-yielding currencies, including the Australian Dollar. 

Investors on Thursday will remain focused on a slew of important US macro releases - revised GDP growth number for Q3 2016, durable goods order for November, personal income / spending data along with the Fed's preferred inflation gauge - core PCE price index for the month of November, and would be looked upon for some immediate respite for bulls.

However, with trading activity already turning dull, on the back of holiday mood, only highly disappointing data might assist the pair to stage some recovery from the lowest level since May 31.

Technical levels to watch

On a sustained weakness below 0.7200 handle is likely to attract fresh selling pressure and continue dragging the pair further towards its next major support near 0.7150-45 region (May monthly lows). On the upside, 0.7220 level now becomes immediate resistance to clear above which a bout of short-covering could lift the pair back towards session peak resistance near 0.7260 area.