AUD/USD struggles near 1-week lows, below mid-0.6400s

The AUD/USD pair managed to rebound around 20-25 pips from one-week lows and was last seen trading with only modest losses, just below mid-0.6400s.

The pair extended this week's retracement slide from the 0.6560-70 supply zone and edged lower for the fourth consecutive session on Thursday. The downtick was sponsored by a combination of factors, including a modest US dollar uptick and deteriorating global risk sentiment.

The Fed Chair Jerome Powell, in a highly anticipated speech on Wednesday, rejected the idea of negative interest rates. This comes amid fears about the second wave of coronavirus infections, which, in turn, helped revive the USD demand and exerted some pressure on the major.

Apart from this, fading hopes for a quick economic recovery weighed on investors' sentiment. The cautious mood was evident from a weaker trading sentiment around the global equity markets, which further dampened demand for the perceived riskier Australian dollar.

The pair was further pressured by Thursday's mixed aussie employment figures, showing that the number of employed people declined more-than-expected, by 594.3K in April. The negative reading was negated by the lower-than-expected rise in the unemployment rate and helped limit deeper losses.

The pair showed some resilience below a three-week-old ascending trend-line. This makes it prudent to wait for some strong follow-through selling, possibly below the Asian session swing lows around the 0.6420 level, before positioning for any further depreciating move.

Moving ahead, market participants now look forward to the Thursday's release of the US Initial Weekly Jobless Claims. The data might influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session.

Technical levels to watch