The AUD/USD pair extended its retracement move from closer to 26-month highs and is currently placed session lows near the 0.7985-80 region ahead of the US economic releases.
The pair retreated over 60-pips from session tops near the 0.8045 region and fall could be solely attributed to some profit taking after the RBA monetary policy statement delivered a little surprise for the bulls. The central bank stated that the current and forecast economic situation was positive, but reiterated its concerns that continuous appreciation of the domestic currency (A$) would create headwinds for growth and extend the time to reach inflation target.
Another factor that might have prompted traders to lighten their positions was the fact that the pair had rallied nearly 500-pips since early June and near-term oversold US Dollar, which now seems due for some profit-taking. Hence, a goodish US Dollar recovery, supported by a modest pickup in the US Treasury bond yields was seen weighing on higher-yielding currencies - like the Aussie.
The pair's retracement post-RBA announcement could also be attributed to a weaker tone around commodity space, especially copper, which tends to dent demand for commodity-linked currencies, including the Australian Dollar.
Next on tap would be the US economic data, with the key focus on the ISM manufacturing PMI, which would be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Immediate support is pegged near the 0.7965-60 region, below which the corrective slide could get extended towards the 0.7900 handle. On the flip side, the 0.80 psychological mark remains an immediate strong supply zone, which if conquered should pave way for extension of the pair's near-term upwards trajectory even beyond multi-month highs resistance near 0.8065 level towards the 0.8100 handle.