AUD / USD clings to modest daily gains around 0.7100 level

• The risk appetite sentiment benefits the AUD and helps the AUD / USD gain traction to the upside.
• Concerns about rising COVID-19 cases support the safe-haven USD and limit the pair’s rise.
• Investors are now waiting for Fed Chairman Jerome Powell’s speech for a new boost.

The pair AUD/USD moves higher during the European session on Monday, staying close to the daily highs, although seems to be having a hard time capitalizing on the move beyond the 0.7100 level.

The renewed hopes for additional measures of fiscal stimulus in the United States and expectations for a coronavirus vaccine later this year have provided a positive boost to global risk sentiment. This has been evident by a tone positive in the stock markets, which has benefited the higher perceived risk Aussie and helped the AUD / USD pair gain some positive traction on the first day of a new week.

However, Concerns that a sharp increase in new coronavirus cases could trigger new lockdown measures and damage the current recovery in the world economy has continued to benefit the US dollar. safe haven. Also, the release of weaker than expected Chinese GDP, coupled with expectations that the RBA will cut interest rates in November, has limited strong gains for the AUD / USD pair.

In fact, the report of the China’s third-quarter GDP has shown that economic growth stood at 4.9%, compared to 5.2% expected. The disappointing figure has largely offset the optimistic figures for retail sales and industrial production, which posted growth of 3.3% and 6.9%, respectively in September.

However, the AUD / USD pair for now appears to have broken two consecutive days of losses and has halted last week’s retracement decline from near the 0.7250 region. That said, it will be prudent to wait for some solid continuation buying before positioning for any further short-term bullish movement amid the absence of relevant US economic releases.

Market participants are now awaiting a scheduled speech from Fed Chairman Jerome Powell. Apart from this, the broader market risk sentiment will influence the USD price dynamics and could generate some significant trading opportunities around the AUD / USD pair.