AUD/USD recovers toward 0.7430 as US Dollar Index slips below 94

• AUD/USD touches session low at 0.7415.
• US Dollar Index loses traction ahead of US data.
• Flight-to-safety weighs on risk-sensitive assets.

After making a strong recovery on Friday and ending the week flat, the AUD/USD pair started the new week under a modest selling pressure and fell to a fresh daily low at 0.7412. However, a broad-based selling pressure witnessed on the greenback helped the pair retrace some of its losses. As of writing, the pair was trading at 0.7430, still down 0.2% on the day.

The US Dollar Index, which stayed stuck in a tight range above the 94 mark during the first half of the day, slipped to a new 11-day low in the last hour at 93.95 and was last seen at 93.98, where it was down 0.23% on the day. Although there were no clear catalysts that may have triggered a USD sell-off, a sharp upsurge seen in the EUR/USD pair looks to be the primary reason behind the greenback weakness.

Later in the session, Chicago Fed National Activity Index, new home sales, and Dallas Fed Manufacturing Index data will be released from the United States.

On the other hand, major European indices are recording heavy losses, reflecting a risk-off mood in the markets, which could make it difficult for the risk-sensitive AUD to continue to gather strength. At the moment, both Germany's DAX and the UK's FTSE 100 indexes are down 1.5%.

Technical levels to consider

On the upside, the pair could face the first technical resistance at 0.7500/10 (psychological level/20-DMA) ahead of 0.7550 (May 13 high) and 0.7625 (100-DMA). Support could be seen at 0.7415 (daily low) ahead of 0.7380 (Jun. 22 low) and 0.7340 (Jun. 21 low).