AUD/USD sinks to fresh monthly lows, below 50-DMA for first time since June

The AUD/USD pair extended its post-FOMC slide from near two-week tops and refreshed monthly lows during early NA session on Thursday.

Against the backdrop of the Fed announcement to start unwinding its massive balance sheet and hints to deliver one more rate hike in 2017, comments from the RBA Governor Philip Lowe exerted some additional pressure on the pair's overnight retracement from the 0.8100 handle. 

The selling pressure got aggravated after S&P lowered Chinese sovereign credit rating, for the first time since 1999, to A+ from AA-. This coupled with a sharp slide in commodity prices, especially copper and gold, further dented the already weaker sentiment surrounding the major 

The pair touched an intraday low level of 0.7920, following the release of better-than-expected weekly jobless claims and Philly Fed manufacturing index from the US, and is now trading below 50-day SMA for the first time since June 6. Hence, a follow through weakness, led by additional long unwinding pressure, now seems a distinct possibility. 

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Technical levels to watch

Bulls would be eyeing to defend the 0.7900 handle, which if broken is likely to accelerate the fall towards 0.7870 horizontal level before the pair eventually drops to 0.7840 support.

On the upside, any recovery attempts back above 50-day SMA, near the 0.7945-50 region, now seems to face resistance near 0.7980 level, which is closely followed by the key 0.80 psychological mark.