AUD/USD plummets to three-week low near 0.7620 level

The AUD/USD pair came under intense selling pressure during mid-European session and tumbled to three-week lows before bouncing off few pips to currently trade around 0.7625 region.

A fresh wave of greenback buying interest, with the key US Dollar Index surging to the 102.00 handle, has been a key factor weighing on the major. Adding to this, softer tone around commodity space further dented demand for commodity-linked currencies - like the Aussie.

Meanwhile, possibilities of some stops getting triggered, on a sustained break below 0.7650-45 important horizontal support, further aggravated the selling pressure and collaborated to the pair's sharp slide in the past hour or so.

Looking at the broader picture, the pair has moved closer to the lower end of recent trading range and hence, a follow through selling pressure below 0.7610-0.7600 region should pave way for extension of the pair's near-term downward trajectory.

Growing market expectations for an eventual Fed rate-hike action at its upcoming meeting on March 14-15 should continue to support strong bullish sentiment surrounding the greenback and hence, decisive break below the mentioned trading range support remains a distinct possibility.

On the economic data front, the release of weekly jobless claims data from the US might provide some trading impetus during early NA session.

Technical levels to watch

On a sustained weakness below the 0.7600 handle, the pair is likely to accelerate the slide towards 0.7580-75 horizontal support before eventually dropping to the very important 200-day SMA support near 0.7525-20 region. On the flip side, 0.7645-50 support break area now seems to act as immediate resistance, which if cleared is likely to trigger a short-covering rally towards 0.7675-80 resistance zone.

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