USD bulls catch a breather ahead of important US data

Over the mid-European session on Tuesday, the AUDUSD pair consolidated its recent decline to its lowest level since October 1. Almost unchanged for the day, the pair was last seen in the 0.7220-region.

Following the recent strong run-up to a 16-month peak, the US dollar bulls took a breather, which helped the AUDUSD pair find some support ahead of the 0.7200 mark. However, there is no apparent factor leading to a sustained recovery from this level.

It is also worth mentioning that concerns over the rising number of COVID-19 cases in Europe and the new lockdown measures in the green continent should put pressure on the Aussie, risk-sensitive currency, at the same time limiting the downside for the safe-haven greenback. The outcome of this further cemented the upside ceiling for the pair, warning aggressive bullish traders to be cautious.

AUDUSD consolidates at seven-week lows

From a technical perspective on the 4-hour chart, AUDUSD has been trading below its 200 period WMA, indicating a bearish outlook as it approaches its two-month low near 0.71700.

Negative pressure has pushed prices below last week's low of 0.72258, motivating sellers to dominate further declines. At the moment of writing, the price is flirting with the 0.72132 latter. Assuming bears overcome this level, the immediate targets are estimated at 0.71970 and 0.71800, respectively.

Conversely, if buyers succeed in breaking through the 0.72720 resistance level, then the bullish scenario will kick in.

Events of the day

On the data front, the preliminary reading of the US PMIs is due to be released later in the day. Market participants expect manufacturing PMI and service PMI to tick up in November to 59.0.

Wednesday will see the release of numbers of important US data, including economic growth in Q3, initial jobless claims, housing figures, the PCE price index and the FOMC minutes, which are expected to lend further support to US dollar demand. . The Fed's preferred measure of price pressure is the core PCE. The index is widely expected to tick upward this month.

Following the PCE, investors will closely focus on the FOMC minutes to discern how the central bank sees the economy. At the time of the taper announcement, the Fed was looking for continued economic growth and a strong job market.