AUD/USD retreats to mid-0.73s as USD starts recovering losses

• Political headlines in the U.S. weigh on the greenback on Wednesday.
• RBA's Debelle supports accommodative monetary policy.
• FOMC August meeting minutes will be eyed next.

After advancing to a fresh session high near 0.7370 earlier in the day, the AUD/USD pair lost its traction and was last seen trading at 0.7450, losing 0.27% on the day.

The pair's upsurge during the European trading hours was fueled by the heavy sell-off witnessed on the buck. Following reports of Michael Cohen, US President Trump's former lawyer, pleading guilty to violating campaign finance laws and agreeing to provide information about Russia's involvement in the 2016 presidential election, the US Dollar Index slumped below the 95 mark for the first time since early August. However, ahead of the FOMC meeting minutes, investors refrained from taking large positions and the DXY recovered to 95.15 to cap the pair's gains.

Earlier in the day, the Reserve Bank of Australia (RBA) Assistant Governor Guy Debelle said he expected the inflation to remain around 2.25% for the next couple of years and added that the current accommodative stance of the monetary policy would help them keep the inflation sustained near their target level.

The data from the United States on Wednesday showed that existing home sales in July declined by 0.7% following June's 0.6% contraction and missed the analysts' estimate of 0.6%. Later in the day, the FOMC is going to publish the minutes of its August meeting. “We will look for any discussion of an inflation overshoot, hiking beyond neutral, yield curve dynamics and/or changes to the operational framework for policy,” TD Securities analysts said in a recently published report.

Technical levels to consider

The initial support for the pair aligns at 0.7350 (20-DMA) ahead of 0.7290 (Aug. 20 low) and 0.7225 (Aug. 13 low). On the upside, resistances are located at 0.7375 (50-DMA), 0.7445 (100-DMA) and 0.7500 (psychological level).