AUD/USD retreats from 4-month tops, back below 0.81 handle

   •  USD bearish pressure eases after Lagarde’s comments.
   •  Overbought conditions prompt some profit-taking.
   •  Bullish commodities could limit any sharp downslide. 

The AUD/USD pair faded a bullish spike to levels beyond the 0.8100 handle and quickly retreated around 30-35 pips from over 4-month tops. 

Against the backdrop of broad-based USD sell-off, the pair on Thursday got an additional boost after S&P Global Ratings affirmed Australia’s sovereign credit ratings at AAA/A-1+ and jumped back above the 0.8100 handle to its highest level since Sept. 8.

The bullish momentum seemed losing momentum at higher levels, which along with the IMF Chief Lagarde’s comments on the US Dollar valuations prompted some additional long-unwinding trade over the past hour or so. 

Meanwhile, near-term overbought conditions could also be one of the reasons behind the pair's modest retracement slide, albeit bullish sentiment around commodity space might limit any deeper corrective slide.

Later in the day, the release of new home sales data, the only highlight from today's US economic docket, would be looked upon for some fresh trading impetus.

Technical levels to watch

A follow-through retracement is likely to find support near the 0.8060 region, which if broken could accelerate fall back towards 0.8030 support en-route the key 0.80 psychological mark.

On the upside, the 0.8100 handle might now act as an immediate resistance, above which the pair is likely to dart towards Sept. 2017 highs resistance near the 0.8125 region.