AUD/USD recovers from near one-month lows, FOMC minutes in focus

The AUD/USD pair staged a goodish recovery on Wednesday and has now recovered the majority of previous session's fall to near one-month lows.

Currently trading around the 0.7840 region, the pair gained some traction on solid Australian wage price data, matching consensus estimates of 0.5% q-o-q growth and 1.9% yearly increase. Adding to this, a lacklustre US Dollar price action also seems to have prompted traders to take some profits off the table, especially after the latest slump of over 100-pips since the beginning of this week.

A string of upbeat US economic data, released on Tuesday, added on to the already weaker sentiment around the major led by cautious RBA monetary policy meeting minutes, which highlighted the economic growth and disinflationary risks associated with further appreciation in the Australian Dollar. 

It, however, remains to be seen if the pair is able to build on the up-move amid repositioning trade ahead of the very important FOMC meeting minutes, which would influence Fed rate hike expectations and eventually determine the next leg of directional move for higher-yielding currencies - like the Aussie.

   •  FOMC minutes preview – Barclays

Today's US economic docket features the release of housing market data - housing starts and building permits, which might provide some short-term trading impetus later during the NA session. 

Technical levels to watch

A follow through recovery now seems to confront some fresh supply near the 0.7875-80 region, a bout of short covering could lift the pair beyond the 0.7900 handle towards its next hurdle near 0.7920 area. 

On the flip side, weakness back below 0.7820 level might continue to find some support near the 0.7800 handle, which if broken would turn the pair vulnerable to aim towards testing 50-day SMA support near mid-0.7700s.