- Risk appetite weighs on the safe-haven USD and helps AUD / USD regain traction.
- The Fed’s optimistic expectations act as a tailwind for the USD and limit the pair’s gains.
- Investors are now waiting for US durable goods orders and speeches from FOMC members for fresh momentum.
The pair AUD/USD maintains its upward movement during the European session on Monday, although has fallen about 15 pips from the daily highs of 0.7290. At the time of writing, the pair is holding on to daily gains around 0.7275.
The pair has managed to gain some positive traction on the first day of a new trading week and has recovered a significant part of Friday’s retracement drop from the 0.7315-20 region. Prevailing risk appetite sentiment has weighed on the safe-haven US dollar and has provided a modest boost to the perceived riskier Australian dollar. However, a combination of factors has acted as a tailwind for the USD and limited any significant gains for the AUD / USD pair, at least for the moment.
Investors remain concerned about the risks of the Evergrande Group debt crisis, especially after the deadline to pay $ 83.5 million in interest on approved bonds passed without any comment from the company. Apart of this, prospects for an early rate hike by the Fed they should help limit any deeper losses for the USD. It’s worth remembering that the Fed’s so-called dot chart indicated the inclination of policymakers to raise interest rates in 2022.
Meanwhile, the pair AUD / USD has been having a hard time finding acceptance or building on momentum above the 0.7300 level. This makes it prudent to wait for sustained strength beyond the 0.7315-20 region before investors begin to position themselves for any further bullish movement. Market participants are now awaiting the release of US Durable Goods Orders and speeches by a number of influential FOMC members for fresh momentum.
AUD / USD technical levels
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