AUD/USD drops to one-week lows amid notable USD demand

The AUD/USD pair extended last Thursday's reversal move from 3-week tops and remained under some selling pressure for the fourth consecutive session.

Currently trading around 0.7425 region, the pair dropped to 7-day lows amid broad based greenback strength and softer tone surrounding commodity space. Political uncertainty stemming out ahead of the UK general election, coupled with renewed worries about Greece's financial situation, weighed on the British Pound and the shared currency, eventually helped the key US Dollar Index to extend its recovery move from 6-1/2-month lows touched last week.

Adding to this, weaker commodity prices, especially copper, further dented demand for commodity-linked currencies, including the Australian Dollar, and collaborated to the offered tone surrounding the major.

Meanwhile, today's upbeat release of Australian Building Approvals, coming-in to show a sharper-than-expected rebound in April but did little to provide any immediate respite for the pair, with the USD price-dynamics acting as an exclusive driver of the pair's slide through Asian session on Tuesday.

Later during the NA session, the US economic docket that includes - Core PCE Price Index, Personal Income / Spending data, followed by Conference Board's Consumer Confidence Index for May would now be looked upon of fresh trading impetus. 
 
Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart shows that the pair bounced after nearing the 50% retracement of the latest bullish run,  at 0.7420, still the immediate support. In the same chart, the price remains below a bearish 20 SMA, whilst technical indicators have turned flat within negative territory, rather reflecting the ongoing lack of directional strength than supporting additional declines. Below the mentioned Fibonacci support, also Friday's low, the risk turns towards the downside, with scope then to extend its slide down to the 0.7365 level, a strong static support."