AUD/USD clings to strong recovery gains near 100-day SMA barrier

The AUD/USD pair staged a goodish recovery on Tuesday and jumped back to 100-day SMA, support turned resistance, to reverse all of its losses posted in the previous session.

The pair snapped three consecutive days of losing streak and gained fresh traction following the release of the National Bank of Australia (NAB's) closely-watched business surveys. In fact, the NAB Business Confidence index rose to 7 for September, while business conditions index held steady at 14 during the recorded period. 

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Meanwhile, the US Dollar extended its post-NFP retracement from over 10-week highs and remained supportive of the pair's strong recovery move from closer to over 2-1/2 month lows, touched on Friday. 

However, growing prospects for additional Fed rate hike move in 2017 might keep a lid on any further up-move for higher-yielding currencies - like the Aussie. Hence, it would now be interesting to see if the pair is able to recover back above a strong support break point, now turned important resistance, near 100-day SMA around the 0.7790 region.

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Technical levels to watch

Momentum beyond the 0.7800 handle could get extended towards 0.7825 horizontal level before the pair eventually moves towards testing 0.7860 strong hurdle. 

On the flip side, mid-0.7700s now becomes immediate strong support to defend, which if broken might turn the pair vulnerable to break below 0.7735-30 area (Friday's low) and head towards the 0.7700 handle.