AUD/USD jumps to mid-0.5800s and retreats, back around 0.5800 mark

The AUD/USD pair spiked to fresh session tops, around mid-0.5800s in the last hour, albeit quickly retreated around 50 pips thereafter.

The pair on Thursday witnessed a dramatic intraday turnaround and has now recovered over 300 pips from the vicinity of the 0.5500 psychological mark, or 17-1/2 year lows set in the wake of a selloff in industrial metals on Chinese exchanges.

Meanwhile, the Reserve Bank of Australia's expected decision to cut interest rates by 25bps and an announcement to commence a government bond purchase program from Friday provided a much-needed respite for the Australian dollar.

The relief rally seemed rather unaffected by a sustained buying surrounding the US dollar. However, a fresh leg down in the US Treasury bond yields capped any further upside for the USD 
and provided an additional boost to the major.

Meanwhile, mounting fears over the economic fallout from the coronavirus pandemic and tightening liquidity conditions might continue to boost the greenback's status as the global reserve currency and keep a lid on any runaway rally for the major.

Technical levels to watch