AUD/USD keeps red near 3-1/2 month lows after US data

Selling pressure around the Australian Dollar remains unabated, with the AUD/USD pair slipping below the 0.7400 handle to hit fresh multi-month low.

Today's disappointing release of Australian trade balance data, coupled with dismal China Caixin Services PMI, added to previous session's sharp rejection move from closer to the very important 200-day SMA. 

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The pair's latest leg of downslide in the past hour or so could also be attributed to a fresh wave of bearish slide in copper prices, which derives demand for commodity-linked currencies, including the Australian Dollar. 

Adding to this, a slightly better-than-expected US economic data, showing weekly jobless claims fell more-than-expected to 238K as against 247K expected during the week ended April 28 and trade deficit for March unexpectedly shrank to $43.7 billion, failed to provide any respite for the bulls.

In other data, non-farm productivity dropped 0.6% during the first quarter of 2017, but the negative impace seems to have been negated by a higher-than-expected rise in unit labor cost, coming-in at 3.0% for the same period. 

Against the backdrop of Wednesday's perceived hawkish Fed monetary policy statement, a follow through up-surge in the US treasury bond yields further collaborated to the heavily offered tone surrounding higher-yielding currencies - like the Aussie.

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Technical levels to watch

The bearish momentum seems strong enough to continue dragging the pair further towards 0.7370 horizontal support ahead of 0.7340 support. A follow through selling pressure would turn it vulnerable to head towards testing the 0.7300 handle.

On the upside, any recovery attempts might now confront immediate resistance near 0.7420 level, above which a bout of short-covering could lift the pair towards previous support break-point, now turned strong resistance near 0.7460 area.