AUD / USD retraces from multi-week highs and falls to the 0.7325 region

• Disappointing data from the housing sector in Australia triggers profit taking around AUD / USD.
• A dovish USD price action could help limit the slide ahead of top-tier US macro data.

The pair AUD / USD is retreating from 12-week highs and has fallen to new daily lows at the start of the European session, around the 0.7325 region. At the time of writing, the pair recovers some of its losses, although it is still negative on the day. near the 0.7350 level.

After an initial rally to the highest level since September 2, the pair has witnessed a modest pullback from the 0.7375 region after the release of pessimistic data from Australia’s housing sector. In fact, construction work performed fell 2.3% quarter-on-quarter during the third quarter of 2020 compared to -2.0% expected and -0.7% previously.

Apart from this, the drop could be further attributed to some repositioning before a lot of American economic publications top notch on Wednesday. The AUD / USD pair has now returned a portion of the previous day’s strong gains, although a softer tone around the USD could help limit any further declines.

The USD remains under pressure due to the optimistic sentiment prevailing in the market, backed by progress on coronavirus vaccines and clarity on America’s political front. It’s worth remembering that President-elect Joe Biden was formally given the green light to begin his transition to the White House.

Furthermore, the news that the former Fed chair, Janet Yellen could become the next US Treasury secretary., provided an additional boost to global risk sentiment. This, in turn, should offer some support to the perceived riskier Aussie and could attract some buying at lower levels around the AUD / USD pair.

Market participants are now awaiting the US economic calendar, highlighting the releases of the preliminary GDP report (second estimate), durable goods orders, initial weekly jobless claims and the final index of consumer sentiment from the University of Michigan for November. This, along with the minutes from the FOMC meeting, should provide further directional momentum to the AUD / USD pair.

AUD / USD technical levels