AUD/USD slides to fresh session lows, closer to mid-0.7300s
- AUD/USD witnessed some selling on Friday and stalled this week’s recovery move from YTD lows.
- COVID-19 jitter weighed on the aussie and exerted some pressure amid a modest USD strength.
- A generally positive risk tone might help limit any deeper losses for the perceived riskier aussie.
The AUD/USD pair extended its steady intraday descent through the early European session and dropped to fresh daily lows, around the 0.7360-55 region in the last hour.
The pair struggled to capitalize on this week's goodish bounce from sub-0.7300 levels, or YTD lows and witnessed some selling in the vicinity of the 0.7400 mark on Friday. The AUD/USD pair, for now, seems to have snapped two consecutive days of the winning streak and was pressured by a combination of factors.
Investors remain concerned about the potential economic fallout from the extended lockdowns in Australia’s two most populous states of Sydney and Victoria. This, in turn, continued acting as a headwind for the aussie. Apart from this, a modest US dollar strength prompted some fresh selling around the AUD/USD pair.
A goodish pickup in the US Treasury bond yields was seen as one of the key factors that underpinned the greenback. That said, the risk-on impulse in the markets held traders from placing aggressive bets around the safe-haven USD. This could lend some support to the perceived riskier aussie and help limit losses.
Market participants now look forward to the release of the flash US PMI prints, due later during the early North American session. This, along with the US bond yields, might influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment for some short-term opportunities around the AUD/USD pair.
Technical levels to watch