AUD/USD quickly bounces off sub-0.7800 level, fresh 2018 lows

   •  On offers for the eighth session in the previous nine.
   •  Modest USD retracement helps ease the bearish pressure.
   •  RBA policy statement/Chinese inflation figures to provide fresh impetus. 

The AUD/USD pair quickly reversed a dip to sub-0.7800 level, fresh 2018 lows, and managed to rebound around 25-30 pips from session lows. 

After Tuesday's brief pause, the pair resumed with its bearish corrective slide and traded with a negative bias for the eighth session in the previous nine. The pair momentarily slipped below the 0.7800 handle but now seems to have found some support at lower levels. 

The selling pressure now seems to have abated, at least for the time being, with a modest US Dollar retracement prompting some short-covering, especially after the recent slump of nearly 350-pips from 20-month tops set on Jan. 26.

Meanwhile, today's better-than-expected weekly initial jobless claims data from the US passed unnoticed and traders now look forward to Friday's RBA Monetary Policy Statement and Chinese inflation figures for some fresh impetus. 

Technical levels to watch

Any follow-through recovery is likely to confront strong resistance near the 0.7860 region (50-day SMA), above which a fresh bout of short-covering could lift the pair back towards the 0.7900 handle.

On the flip side, sustained weakness below the 0.7800 handle now seems to pave the way for an extension of the pair's bearish trajectory further towards testing the very important 200-day SMA support near mid-0.7700s.