- AUD/USD wallows in yearly lows after the 0.7400 level caves in.
- The pair breaches key support on the daily chart at 0.7480.
- The aussie eyes more losses, with the daily RSI still not oversold.
AUD/USD remains on a downward spiral for the third straight day this Monday, starting out a new week on the wrong footing, courtesy of the growing fears over the rapid spread of the Delta covid variant worldwide.
Covid cases in the UK and Australia jumped over the weekend, with Victoria announcing an extension to the lockdown, dents the sentiment around the higher-yielding aussie.
Investors flock to the safe-haven US dollar in times of uncertainty and panic, adding to the losses in the currency pair.
The downtrend in the spot could be also contributed to a bearish technical setup on the daily chart. The bears tightened their grip after the price breached the critical falling trendline support on the said time frame at 0.7380.
The 14-day Relative Strength Index (RSI) points south, sitting outside the oversold territory, suggesting that there is more play to the downside.
Therefore, a test of the 0.7350 psychological level cannot be ruled out if the yearly lows yield into the renewed selling pressure.
AUD/USD daily chart
On the other hand, any pullback attempts would face an immediate supply zone around daily highs of 0.7417.
Further up, Friday's high of 0.7444 could challenge the bullish commitments on the road to recovery.