- AUD / USD gains traction for the third day in a row on Tuesday.
- The decline in US bond yields weighs on the USD and supports the pair’s rise.
- Market optimism further benefits AUD, which is higher perceived risk.
The pair AUD/USD clings to its intraday gains at the start of Tuesday’s European session, staying positive on the day above the 0.7700 level. At time of writing, the pair is pulling back from highs near 0.7730
The pair has built on last week’s bounce, from the 0.7565 region at one-month lows, and has moved higher for the third day in a row on Tuesday. The prevailing appetite for risk has been seen as one of the key factors that has weighed on the safe haven US dollar and benefited the higher perceived risk Australian dollar.
Global risk sentiment has remained backed by progress in coronavirus vaccines, which has been fueling hopes for a strong global economic recovery. Apart of this, developments to accelerate the $ 1.9 trillion stimulus package proposed by US President Joe Biden have further boosted investor confidence.
Meanwhile, the unimpressive US jobs report on Friday has raised questions about a relatively faster economic recovery in the United States from the coronavirus pandemic. This, along with a change in US Treasury yields. Since the highest level since March 2020, it has weighed on the US dollar and provided an additional boost to the AUD / USD pair.
The pair has soared to nearly two-week highs, although it has struggled to overcome the resistance of a one-month downtrend line. This makes it prudent to wait for sustained strength above the aforementioned barrier before positioning for any further bullish movement amid the absence of any relevant US economic data release.
AUD / USD technical levels
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