AUD/USD retreats to 200-day SMA as downside potential grows

• The Aussie shifts lower as Powell talk boosts USD.
• Fed chairman testimony driving majors across markets.

The Aussie spent most of Tuesday's trading session falling, and heads into Wednesday on a low point, near 0.7790.

With a notable lack of impactful macro releases for the Aussie so far this week, the AUD/USD pair is free to suffer at the hands of general market sentiment. Middling economic data and hampered economic growth for the island nation has left the Reserve Bank of Australia (RBA) well behind the curve of global rate hike expectations: non-existent wage growth and unsustainable levels of household debt for Australia has left the RBA no choice but to stand pat on interest rates, with few expecting any action from the central bank well into 2020.

Following Congressional testimony from new Fed chairman Jerome Powell, the Greenback gained some favour with traders, and Dollar bidding has sent the Aussie back down near February lows. The AUD/USD now heads into NFP territory in retreat, and further Dollar support could see the pair plunge to its lowest prices in months.

AUD/USD Technicals

As noted by FXStreet's own Valeria Bednarik, "from a technical point of view, the 4 hours chart shows that the pair settled below its 20 SMA which lacks clear directional strength, and below a strong Fibonacci level around 0.7820, the immediate short-term resistance. In the same chart, technical indicators stand below their mid-lines but are also directionless, anyway leaning the scale toward the downside."

Support levels: 0.7790 0.7760 0.7725

Resistance levels: 0.7820 0.7850 0.7890