AUD/USD hits 0.7700 level for the first time since early May

Extending its near-term bullish traction, the AUD/USD pair has now jumped above 0.7700 handle for the first time since early May. 

A broadly weaker US Dollar has been the key theme in the FX market since NA trading session on Tuesday after second-quarter US nonfarm productivity posted an unexpected decline for third straight quarter. Disappointing productivity data has now convinced markets that the Federal Reserve might refrain from raising interest rate for longer and is thus assisting recovery in high-yielding currencies - like Aussie.

The pair, on Wednesday, even ignored dovish comments from RBA Governor Glenn Stevens that inflation might remain low for a while, which might prompt the central bank to ease further.

A lighter economic calendar on Wednesday is unlikely to provide fresh impetus and the pair might continue to take cues from broader sentiment surrounding the US Dollar.

Technical levels to watch

On a sustained strength above 0.7700 handle, the pair seems to extend its bullish momentum towards 0.7748-50 resistance, which if conquered should open room for continuation of the pair's upward trajectory in the near-term.

On the flip side, 0.7670 level now become immediate support to defend, below which the pair could drop back to test 0.7630 support. A follow through selling below 0.7630 support might now negate near-term bullish bias and drag the pair initially towards 0.7585 intermediate support and eventually towards its next major support near 0.7535-30 region.