AUD/USD refreshes daily low below 0.6900 mark, downside remains limited

The AUD/USD pair extended its retracement slide from five-month tops and slipped below the 0.6900 mark, or fresh daily lows during the early European session.

The pair stalled its recent bullish trajectory and witnessed a modest pullback from the vicinity of the key 0.7000 psychological mark. The intraday slide of over 100 pips lacked any obvious fundamental catalyst and could be solely attributed to some profit-taking.

Extremely overbought conditions on short-term charts seemed to be the only factor that prompted traders to take some profits off the table. However, a combination of supporting factors helped limit any meaningful fall, rather might attract some dip-buying.

Growing optimism over a sharp V-shaped recover for the global economy remained supportive of the upbeat market mood. This, in turn, kept the safe-haven US dollar under pressure and extended some support to the perceived riskier Australian dollar.

Hence, it remains to be seen if the downtick marks the end of the AUD/USD pair's recent strong recovery move from the 0.5500 neighbourhood – 17-year lows – or is still seen as an opportunity to initiate some fresh bullish positions.

Market participants now look forward to the US macro data for some impetus later during the early North American session. Wednesday's US economic docket highlights the release of the ADP report on private-sector employment and ISM Non-Manufacturing PMI.

Technical levels to watch