AUD/USD clings to strong gains beyond 0.7400 handle

The AUD/USD pair extended its recovery trend for the third straight session and is now holding comfortably above 0.7400 handle. 

Currently trading at a four-day high, around 0.7430-35 band, the pair shrugged-off disappointing Australian construction output data that showed a higher-than-expected contraction of 4.9% during the third quarter of 2016. The pair benefitted from improvement in Chinese business confidence, with the indicator rising to 53.1 in November from a five-month low recorded in October. 

Signs of improving economic outlook in the world's second-largest economy, also Australia's largest trading partner, extended support to the bid tone surrounding the Australian Dollar. Also the prevalent risk-on mood boosted was also seen boosting demand for riskier/higher-yielding currencies - like Aussie. 

Later during NA session, US economic data that includes - durable goods orders, weekly jobless claims and new home sales, would be looked upon for short-term trading opportunities. Major focus, however, would be on the release of FOMC meeting minutes, which if reaffirm market expectation of a December Fed rate-hike action might attract fresh selling pressure around the major. 

Technical levels to watch

Immediate upside resistance is pegged near 0.7445-50 region, which if cleared is likely to boost the pair immediately towards 0.7470-75 intermediate resistance before the pair eventually rises beyond 0.7500 psychological mark to test the very important 200-day SMA resistance near 0.7520 region. 

On the downside, 0.7400 round figure mark now becomes immediate support to defend, which if broken might negate bullish bias and drag the pair immediately towards 0.7375-70 support en-route 0.7335-30 strong support.

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