AUD/USD defends 0.7100 mark for now.

The AUD/USD pair dropped to fresh multi-month lows during the early North American session, with bears still awaiting a sustained break below the 0.7100 mark.

The pair extended this week's downward trajectory for the fifth successive session on Friday and was weighed down by the worsening COVID-19 situation in Australia. Having suffered its worst day since the start of the pandemic, the Australian state of New South Wales (NSW) extended the greater Sydney lockdown until the end of September. This, along with the prevalent risk-off environment, weighed heavily on the perceived riskier aussie.

Against the backdrop of worries about the Delta variant of the coronavirus, expectations that the Fed will begin to roll back its crisis-era stimulus took its toll on the global risk sentiment. In fact, the minutes of the last FOMC meeting held on July 27-28 convinced investors that the Fed is comfortable to reduce the pace of its massive asset purchase program. This was seen as a key factor that acted as a tailwind for the safe-haven US dollar.

Despite the combination of negative factors, the AUD/USD pair, so far, has managed to hold its neck above the 0.7100 round-figure mark amid oversold RSI on short-term charts. That said, the fundamental backdrop remains tilted in favour of bearish traders and supports prospects for further losses. Hence, any attempted recovery move might still be seen as a selling opportunity amid absent relevant market-moving economic releases from the US.