AUD/USD drops to 4-week lows after US retail sales

AUD/USD dropped further during the American session weakened by a stronger US dollar. The greenback gained strength after the release of an upbeat retail sales report. The pair was already lower on the back of the minutes of the latest RBA meeting. 

Lower lows

During the American session, AUD/USD bottomed at 0.7806, the lowest since July 18. Afterward bounced modestly to the upside as the USD rally lost momentum. The recovery from the lows was capped below 0.7830 and currently trades at 0.7815/20. 

The Aussie is headed toward the fourth daily decline out of the last five days as it continues to decline from levels on top of 0.8000, it reached two weeks ago. 

The US dollar was rising before consumer data, support by rising US bond yields. The report showed that retails sales rose in July 0.6% above the 0.3% expected. Also, June numbers were revised higher. The strong report boosted the greenback and favored the continuation of the bearish correction in AUD/USD. US:

Consumer demand started the third quarter on a strong footing - Wells Fargo

RBA minutes: Further rise in AUD could lead to slower growth, lower inflation

Technical levels 

To the upside, resistance levels might be seen at 0.7820/25 (European session low), 0.7845 (Aug 14 low) and 0.7875 (daily high). On the flip side, support could be located at 0.7800, 0.7785 (Jul 18 low) and 0.7740/45 (Jul 13 high).