AUD/USD refreshes daily lows, around 0.7020-15 region amid risk-off mood

The AUD/USD pair quickly retreated around 35-40 pips from the Asian session swing highs and refreshed daily lows, around the 0.7020-15 region in the last hour.

The pair failed to capitalize on its attempted recovery move, instead met with some fresh supply near the 0.7055 region and has now drifted into the negative territory for the third consecutive session. Growing market worries about the economic fallout from news COVID-19 restrictions continued weighing on investors' sentiment. This was evident from a steep decline in the US equity futures, which, in turn, drove flows away from the perceived riskier Australian dollar.

Meanwhile, the downside remains cushioned, at least for the time being, amid a subdued US dollar price action. The uncertainty about the actual outcome of the US presidential election and the possibility that the outcome could be contested held the USD bulls from placing any aggressive bets. That said, any attempted recovery move for the AUD/USD pair is more likely to fizzle out rather quickly amid expectations that the RBA will cut interest rates in November.

From a technical perspective, the AUD/USD pair, so far, has been finding decent support near the key 0.7000 psychological mark. This makes it prudent to wait for some strong follow-through selling before positioning for an extension of the recent pullback from the 0.7155-60 supply zone. The pair might then accelerate the fall further towards the 0.6940-35 region.

Moving ahead, market participants now look forward to the some second-tier US economic releases – Core PCE Price Index, Chicago PMI and revised Michigan Consumer Sentiment Index. This, along with the broader market risk sentiment and developments surrounding the coronavirus saga, will influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.

Technical levels to watch