AUD/USD slides to session lows, bears eyeing a break below 0.7400 mark

• AUD/USD failed to capitalize on its early uptick, instead met with some supply at higher levels.
• COVID-19 jitters benefitted the safe-haven USD and prompted fresh selling around the major.

The AUD/USD pair quickly retreated around 15-20 pips in the last hour and has now dropped to the lower end of its daily trading range, around the 0.7410 region.

Following the previous day's solid intraday bounce of around 80 pips and a subsequent pullback from the highest level since June 2018, the pair edged higher during the early part of the trading action on Tuesday. The early uptick was supported by better-than-expected Australian data, though a softer risk tone kept a lid on any meaningful gains for the AUD/USD pair.

Data released this Tuesday showed Australia’s third-quarter House Price Index rose +0.8% QoQ as against a 1% fall anticipate and the yearly rate eased to 4.5% from 6.2% previous. Separately, the National Australia Bank’s (NAB) Business Confidence Index jumped to 12 for November as compared to the previous month's downwardly revised reading of 3 (5 reported previously).

That said, a slight deterioration in the global risk sentiment capped the upside for the perceived riskier Australian dollar. Growing market worries about the continuous surge in new coronavirus cases overshadowed the optimism about more US fiscal stimulus measures. This, in turn, drove some haven flows towards the US dollar and prompted some selling at higher levels.

In the absence of any major market-moving economic releases from the US, the broader market risk sentiment will continue to play a key role in influencing the USD price dynamics. This, along with the US stimulus headlines and developments surrounding the coronavirus saga, will also be looked upon to grab some meaningful trading opportunities around the AUD/USD pair.

Technical levels to watch