AUD/USD bounces back above 0.78 handle

   •  USD consolidates overnight strong gains to near three-week tops. 
   •  Aussie finds decent support at 200-day SMA despite weaker Chinese PMI. 
   •  Prelim US Q4 GDP growth figures should provide some fresh impetus.

The AUD/USD pair managed to defend the very important 200-day SMA support and has now recovered back to the 0.7800 handle. 

On Tuesday, the new Fed Chair Jerome Powell's first congressional testimony strengthened the case for a faster monetary policy tightening cycle and prompted some aggressive selling around higher-yielding currencies - like the Aussie. 

With the US Dollar consolidating overnight strong gains, the pair found some decent support near the 0.7780 region. The market seems to have largely ignored today's weaker than expected release of Chinese official PMI prints - manufacturing and services, which tends to weigh on China-proxy Australian Dollar. 

In absence of any fresh development, the modest rebound could be attributed to some short-covering move from a technically important moving-average support. Hence, it would now be interesting to see if the pair is able to build on the recovery gains or the up-move is seen as an opportunity to initiate fresh short positions. 

Technical levels to watch

Immediate resistance is pegged near the 0.7820 region (100-day SMA), above which the pair is likely to recover further towards 0.7855-60 supply zone en-route the 0.7900 handle. On the flip side, sustained weakness below the 0.7780 region (200-day SMA) would suggest a fresh bearish breakdown and pave the way for an extension of the pair's near-term bearish trajectory.