• AUD/USD comes under some selling pressure on Thursday amid resurgent USD demand.
• Sliding US bond yields, risk-on mood caps the safe-haven buck and helps limit the slide.
• Bets for more aggressive rate hikes by the RBA might continue to lend support to the pair.

The AUD/USD pair retreats nearly 100 pips from a three-week high touched earlier this Thursday, though the intraday downfall finds some support near the 0.6425 region. The pair quickly recovers a few pips through during the early North American session and is currently placed around the 0.6475-0.6480 area, still down over 0.30% for the day.

The US dollar stages a goodish intraday bounce from its lowest level since September 20 and turns out to be a key factor exerting downward pressure on the AUD/USD pair. The USD maintains its bid tone after the Advance US GDP report showed that the world's largest economy expanded by a 2.6% annualized pace during the third quarter, beating estimates for a print of 2.4%. This marks a sharp reversal from the 0.6% fall in the previous quarter and the 1.6% decline registered in the first three months of the year.

This, however, was partly offset by the fact that the GDP price index rose just 4.1%, well below the 5.3% expected and down more than half from 9.0% in the previous quarter. This could be perceived as the first sign of a moderation in inflationary pressure, which adds to speculations that the Fed will soften its hawkish stance. The expectations led to a fresh leg down in the US Treasury bond yields. This, along with the risk-on impulse, caps the safe-haven buck and offers some support to the risk-sensitive aussie.

Apart from this, rising bets for a more aggressive policy tightening by the Reserve Bank of Australia, bolstered by Wednesday's stronger consumer inflation figures, should act as a tailwind for the AUD/USD pair. Hence, any meaningful pullback might still be seen as a buying opportunity and is more likely to remain short-lived. The upside potential, however, seems limited as the focus shifts to the FOMC meeting next week.

Technical levels to watch