AUD/USD retreats further from multi-week tops, slides below mid-0.6300s

• AUD/USD witnessed a dramatic turnaround from multi-week tops.
• A goodish pickup in the USD prompted some selling on Wednesday.
• Bears dragged the pair to the lower end of its weekly trading range.

The AUD/USD pair added to its Asian session losses and refreshed daily lows, below mid-0.6300s in the last hour.

The pair stalled its recent bullish momentum to five-week tops and witnessed a sharp turnaround on Wednesday, snapping seven consecutive days of winning streak. The pair started retreating from the vicinity of mid-0.6400s and the downtick was sponsored by a goodish pickup in the US dollar demand.

Despite the latest optimism over a steady trend down in the new coronavirus cases and deaths across the world, investors remain concerned over the economic fallout from the pandemic. This eventually benefitted the USD’s status as the global reserve currency and prompted some fresh selling around the major.

This comes amid a softer tone surrounding the global equity markets. The prevalent cautions mood further undermined demand for perceived riskier currencies, including the aussie, and contributed to the pair’s intraday downfall of around 100 pips, back closer to the lower end of its weekly trading range.

It will now be interesting to see if the pair is able to find any support at lower levels or investors opts to further unwind their bullish bets ahead of the US macro releases. Wednesday’s US economic docket highlights the release of monthly retail sales data and industrial production figures.

The data will be looked upon to assess the economic damage caused by the COVID-19-induced lockdowns, which should play a key role in influencing the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.

Technical levels to watch