AUD/USD retreats from 2-week tops, turns neutral around 0.6170-65 region

The AUD/USD pair struggled to capitalize on its goodish intraday bounce and quickly retreated around 40-50 pips from two-week tops, levels beyond the 0.6200 round-figure mark.

The pair quickly reversed an early Asian session dip to the 0.6080 region and rallied over 140 pips in reaction to upbeat Chinese macro data, showing a sharp rebound in manufacturing sector activity. In fact, the official Chinese Manufacturing PMI for March surpassed even the most optimistic estimates and jumped back in the expansion territory.

Adding to this, China's Services PMI also bettered market expectations and moved back above the 50 levels and underpinned the China-proxy Australian dollar. This comes on the back of a massive $2.2 trillion US stimulus package, which remained supportive of a further recovery in the global risk sentiment and benefitted perceived riskier currencies, including the aussie.

Despite the latest optimism, persistent worries about the economic fallout from the coronavirus pandemic continued lending some support to the US dollar's perceived safe-haven status. This eventually kept a lid on any strong follow-through gains, rather prompted some selling at higher levels and thus, warrants some caution before placing fresh bullish bets.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and Conference Board's Consumer Confidence index – in order to grab some short-term trading opportunities. Meanwhile, the key focus will remain on developments surrounding the coronavirus saga.

Technical levels to watch