AUD/USD eases off weekly highs at 0.7330 as virus concerns lift US dollar

• AUD/USD retreat from weekly highs but defends 0.7300.
• DXY attempts a bounce as sentiment turns sour in Europe.
• Coronavirus concerns negate vaccine hopes, eyes on US spending data.  

AUD/USD’s retreat from weekly highs of 0.7330 picked up pace in the European session, as rates battle 0.7300 amid a return of risk-aversion.

The risk-off mood has crept back into the markets, in wake of the surge in the coronavirus cases and localized lockdowns in the North Hemisphere, which seems to have taken off the froth from the vaccine optimism.

The shift in the risk sentiment helped the safe-haven US dollar recovery some ground across its main peers, limiting the upside in the higher-yielding aussie. The US dollar index bumped up from daily lows of 92.46 to now trade at 92.60.

The pullback in the aussie can be also related to the losses in the S&P 500 futures. The futures tied to the S&P 500 futures drop 0.25% on the day to 3,6415, reversing from record-high levels.

The major surged past the 0.73 for the first time in four days on Monday after the risk-rally picked up pace after Moderna Inc. announced that its vaccine showed 95% efficacy in preventing the infections in its last stage of the clinical trials.

Looking ahead, the US Retail Sales data, covid stats and sentiment on the global markets will be closely followed for fresh cues on the spot.

AUD/USD technical levels

“The monthly high of 0.7340, marked on November 09, could become the first one to hinder the short-term buyers ahead of directing them to more than a three-week-old resistance line, near 0.7370 now. Alternatively, a downside break of 0.7270/75 support confluence, comprising the stated SMA and a fortnight-long rising trend line, will have to slip beneath a short-term horizontal area around 0.7240/45 to recall the bears.,” Anil Panchal, FXStreet’s Analyst explained.

AUD/USD additional levels