AUD/USD recovers modestly from 6-week lows toward mid-0.78s

The AUD/USD dropped to its lowest level since since August 16 at 0.7836 in the early NA session before starting to retrace its losses. As of writing, the pair was trading at 0.7855, losing 0.4% on the day.

The pair's price action continues to be dominated by the greenback demand on Wednesday. Today's data from the U.S. showed that new orders for manufactured durable goods in August increased by 1.7% in August following July's sharp 6.8% contraction, lifting the US Dollar Index to its best level in more than a month at 93.42. At the moment, the index is at 93.35, gaining 0.58% on the day. 

On the other hand, the commodity-sensitive aussie is showing some resilience against the buck on the back of rising copper prices. After recording daily losses on Monday and Tuesday, copper futures are now up 0.3% on the day. Nevertheless, the pair's loss since the start of the week is now over 100 pips as investors remain focused on the increasing odds of another 25 basis points Fed rate hike in December.

• AUD at behest of DXY – Westpac

With no more significant macroeconomic data left in the remainder of the session, investors will be closely following Fed Governor Brainard's and St. Louis Fed President Bullard's speeches and look for fresh clues on the monetary policy outlook.

Technical outlook

Although the pair is falling for the third straight day, the RSI indicator on the daily graph hasn't reached the 30 mark yet, suggesting that the pair could extend its losses before it becomes technically oversold. 0.7820 (100-DMA) is the first significant support ahead of 0.7785 (Jul. 17 low) and 0.7730 (Jul. 14 low). On the upside, resistances align at 0.7890 (daily high), 0.7945 (50-DMA) and 0.7985 (20-DMA).