AUD/USD slumps to multi-week lows below 0.7250 on broad USD strength

• AUD/USD came under stong bearish pressure in the European session on Friday.
• US Dollar Index tests 96.00 supported by safe-haven flows.
• There won't be any high-impact data releases from the US.

Following a consolidation phase below 0.7300 during the Asian trading hours, the AUD/USD pair lost its traction and dropped to its weakest level since early October at 0.7232. As of writing, the pair was down 0.52% on the day at 0.7252.

Dollar capitalizes on safe-haven flows

The renewed USD strength seems to be causing AUD/USD to fall sharply on Friday. The US Dollar Index (DXY), which closed the previous two trading days in the negative territory, is currently rising 0.5% on a daily basis at 96.00. The souring market mood amid concerning coronavirus headlines coming from Europe seems to be helping the greenback find demand as a safe haven.

The S&P Futures are trading in the red, suggesting that Wall Street's main indexes could stay on the back foot ahead of the weekend.

Later in the session, there won't be any data releases from the US but Federal Reserve Governor Christopher Waller and Federal Reserve Vice Chair Richard Clarida will be delivering speeches. Investors will keep a close eye on comments regarding the Fed's policy outlook in the face of persistently high inflation.

Technical levels to watch for