AUD/USD remains vulnerable near multi-week lows amid dovish RBA expectations

The AUD/USD pair maintained its offered tone through the early North American session and dropped to fresh multi-week lows, around the 0.7020 region in the last hour.

The pair extended its recent sharp pullback from the 0.7240-45 region and witnessed some follow-through selling for the fourth consecutive session. The downtick also marked the sixth day of a negative move in the previous seven and was sponsored by rising bets for a further easing by the Reserve Bank of Australia (RBA).

Market expectations that the Australian central bank will cut interest rates were reinforced by Thursday's comments by the RBA Deputy Governor, Chris Kent and October meeting minutes. Dovish RBA expectations turned out to be one of the key factors that took its toll on the aussie and exerted some heavy pressure on the AUD/USD pair.

Meanwhile, the ongoing downward trajectory to the lowest level since September 25 seemed rather unaffected by the prevalent selling bias surrounding the US dollar. The uncertainty over the US fiscal stimulus measures, along with the upbeat market mood undermined the greenback, albeit failed to lend any support to the AUD/USD pair.

On the economic data front, the disappointing release of the US Housing Starts was largely offset by slightly better-than-expected Building Permits. The data did little to influence the AUD/USD pair or provide any meaningful impetus as the focus remains on developments surrounding the US fiscal stimulus and coronavirus saga.

The AUD/USD pair has now moved well within September monthly swing lows support, around the key 0.7000 psychological mark. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move. The downtrend might then drag the pair towards testing sub-0.6900 levels.

Technical levels to watch