- The sustained sale of the USD pushes the AUD / USD to new three-year highs on Tuesday.
- A slightly overbought RSI on the daily chart is preventing bulls from opening new positions.
- Investors are now looking forward to Powell’s testimony for new business momentum.
The pair AUD/USD now appears to have entered a bullish consolidation phase, staying within a range just above the 0.7900 level at the start of the European session on Tuesday.
The pair has built on its recent upward move and gained some traction during the early part of Tuesday’s trading action. The momentum has been due to prevailing selling bias around the US dollar, although a slightly overbought RSI on the daily chart has capped any further gains for the AUD / USD pair.
The USD has weakened near six-week lows amid doubts about the relatively faster US economic recovery and has come under further pressure from the underlying bullish tone in financial markets. Global risk appetite sentiment has remained supported by progress on COVID-19 vaccines and the US fiscal stimulus plan.
The House of Representatives Budget Committee voted Monday to promote the $ 1.9 trillion coronavirus stimulus package proposed by US President Joe Biden. This, in turn, pushed the yield on the US government’s benchmark 10-year bond to new one-year highs, although it did little to offer respite to USD bulls.
That being said, the pair’s bulls have taken a breather and stood by before Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee. Meanwhile, the US Conference Board Consumer Confidence Index could influence the USD and generate some opportunities around the AUD / USD pair at the start of the American session today.
AUD / USD technical levels