AUD/USD slides to fresh session lows, around 0.7725-20 region

• AUD/USD witnessed some selling on Thursday amid a goodish pickup in the USD demand.
• Mixed Australian data, softer Services PMI from China also contributed to the selling bias.
• Investors look forward to the US macro releases for some meaningful trading opportunities.

The AUD/USD pair added to its intraday losses and dropped to fresh daily lows, around the 0.7725-20 region heading into the European session.

Following the previous day's good two-way price moves, the pair met with some fresh supply on Thursday and was pressured by a combination of factors. Mixed macro data out from Australia, along with softer Chinese Services PMI acted as a headwind for the aussie. Apart from this, a goodish pickup in the US dollar demand was seen as another factor that exerted some downward pressure on the AUD/USD pair.

According to the data released earlier this Thursday, Australia's Retail Sales recorded a growth of 1.1% in April, while Trade Balance came in to show a surplus of A$ 8.028 billion. However, the fact that the surplus was primarily led by a slump in imports failed to impress the aussie bulls. Separately, a private survey by Caixin indicated a slower growth in China's services sector in May.

On the other hand, the US dollar found some support from signs of stability in the US Treasury bond yields. Apart from this, the prevalent cautious mood around the equity markets further benefitted the greenback's relative safe-haven status and drove flows away from the perceived riskier aussie. That said, dovish Fed expectations might hold the USD bulls from placing any aggressive bets.

Various FOMC officials have downplayed worries about runaway inflation and reiterated that any spike in prices would prove to be temporary. Investors now seem aligned with the Fed's stubbornly dovish view and have been scaling back their bets for an earlier than anticipated Fed lift-off. This, in turn, warrants some caution before positioning for any sharp fall for the AUD/USD pair.

Market participants now look forward to important US macro data for a fresh impetus. The US economic docket highlights the release of the ADP report on private-sector employment, the usual Initial Weekly Jobless Claims and the ISM Services PMI. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities around the AUD/USD pair.

Technical levels to watch