AUD/USD struggles near monthly lows, holds above 0.7600 mark

The AUD/USD pair remained depressed through the early European session and was last seen hovering near one-month lows, around the 0.7625-20 region.

The pair added to the previous day's losses and witnessed some follow-through selling for the second consecutive session on Thursday. The prevalent risk-off mood continued driving some haven flows towards the US dollar and was seen as a key factor weighing on the perceived riskier aussie.

Investors turned cautious amid concerns about the economic fallout from the imposition of fresh COVID restrictions. In fact, the UK announced new measures to clamp down on travel to/from Britain, while China also sought to limit Lunar New Year trips to stem a surge in COVID-19 cases.

Adding to this, delay in coronavirus vaccines, along with doubts about the timing and size of a new US economic stimulus package further dampened the mood. Given that a lot of positive news was already priced in the markets, the developments served as a catalyst for investors to book profits.

Meanwhile, the USD bulls seemed rather unaffected by the ongoing decline in the US Treasury bond yields and also shrugged off Wednesday's dovish FOMC statement. The Fed raised concerns about the pace of economic recovery and said that the ongoing public health crisis poses risks to the outlook.

The market focus now shifts to Thursday's release of the Advance US Q4 GDP report, due later during the early North American session. Apart from this, the market risk sentiment will influence the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch