AUD/USD bears remain in full control, 0.78 mark at risk

The AUD/USD pair finally broke down of its European session bearish consolidative phase and tumbled to fresh session low, near the 0.7800 handle.

The pair met with some fresh supply after better-than-expected US economic releases - weekly jobless claims and trade balance data, which provided an additional boost to the already stronger US Dollar.

Adding to this, hawkish comments by the Philadelphia Fed President Patrick Harker and San Francisco Fed President John Williams, reinforcing December Fed rate hike expectations, lifted the US Treasury bond yields across the board and further collaborated towards driving flows away from higher-yielding currencies - like the Aussie. 

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Against the backdrop of today's weaker Australian retail sales data, the prevalent bullish sentiment around the greenback, and the US bond yields, a follow through weakness, below 2-1/2 month lows touched earlier this week, now seems a distinct possibility.

Traders on Thursday would also confront the release of US factor orders data, which along with Fedspeaks would now drive the pair ahead of Friday's keenly watched NFP data.

Technical levels to watch

Weakness below the 0.7800 handle is likely to accelerate the fall towards 100-day SMA support near the 0.7780 region, which if broken would turn the pair vulnerable to extend the slide towards the 0.7700 handle.

On the upside, any recovery attempts beyond 0.7825 level might now confront fresh supply near mid-0.7800s, above which a bout of short-covering could lift the pair beyond 0.7870-75 supply zone towards the 0.7900 handle.