AUD/USD slides below 0.7300 mark for the first time since November 2020

The AUD/USD pair dropped to fresh multi-month lows heading into the European session, with bears now looking to extend the downward trajectory further below the 0.7300 mark.

The pair prolonged its recent bearish trend and witnessed some follow-through selling for the fifth consecutive session on Wednesday. The extended lockdowns in Australia’s two most populous states of Sydney and Victoria continued acting as a headwind for the aussie, which was further pressured by disappointing macro data.

In fact, preliminary figures from the Australian Bureau of Statistics (ABS) showed that retail turnover in June fell 1.8% from a month earlier. This marked the biggest drop in 2021 and further fueled worries about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus.

The data further cast a shadow over the outlook for growth in the third quarter amid the continuous rise in COVID-19 cases and overshadowed a generally positive tone around the equity markets. Apart from this, sustained US dollar buying further contributed to the AUD/USD pair's decline to the lowest level since November 2020.

Growing market fears about fresh COVID-19 outbreaks continued underpinning demand for the safe-haven greenback and drove flows away from the perceived riskier aussie. In fact, the key USD Index stood tall near three-and-half-month tops and for now, seemed rather unaffected by a fresh leg down in the US Treasury bond yields.

In the absence of any major market-moving economic releases from the US, developments surrounding the coronavirus saga will play a key role in influencing the USD price dynamics. Traders might further take cues from the broader market risk sentiment in order to grab some short-term opportunities around the AUD/USD pair.

Technical levels to watch