- Disappointing housing data from Australia prompted some profit-taking around AUD/USD.
- A subdued USD price action might help limit the downside ahead of top-tier US macro data.
The AUD/USD pair extended its intraday corrective slide from 12-week tops and dropped to fresh session lows, around the 0.7325 region in the last hour.
Following an early uptick to the highest level since September 2, the pair witnessed a modest pullback from the 0.7375 region following the release of downbeat housing data from Australia. In fact, the Construction Work Done fell 2.3% QoQ during the third quarter of 2020 as compared to -2.0% anticipated and -0.7% previous.
Apart from this, the downtick could further be attributed to some repositioning trade ahead of a flurry of top-tier US economic releases on Wednesday. The AUD/USD pair has now eroded a part of the previous day's strong gains, albeit a softer tone surrounding the US dollar might help limit any further losses.
The greenback remained depressed on the back of the prevalent upbeat market mood – supported by progress toward remedies for the highly contagious coronavirus disease and clarity on the US political front. It is worth recalling that President-elect Joe Biden was formally given a go-ahead to begin his transition to the White House.
Adding to this, reports that the former Fed Chair Janet Yellen could become the next US Treasury Secretary provided an additional boost to the global risk sentiment. This, in turn, should extend some support to the perceived riskier Australian dollar and could attract some dip-buying around the AUD/USD pair.
Market participants now look forward to the US economic docket, highlighting the releases of the preliminary (second estimate) GDP report, Durable Goods Orders, Initial Weekly Jobless Claims and final Michigan Consumer Sentiment Index for November. This, along with the FOMC meeting minutes should provide a fresh directional impetus to the AUD/USD pair.
Technical levels to watch
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