- AUD / USD gains some positive traction on Tuesday and breaks a two-day losing streak.
- Risk appetite weighs on the safe-haven USD, benefiting the higher perceived risk AUD.
- The optimistic outlook from the Fed should limit the USD’s slide and limit the pair’s gains amid COVID-19 fears.
The pair AUD/USD maintains its upward momentum during the first half of the European dunk session, staying near daily highs around the 0.7125-30 region.
A shift in global risk sentimentAs shown by a positive tone around the stock markets, weighed on the safe-haven US dollar. This, in turn, was seen as a key factor that benefited the perceived riskier Aussie and helped the AUD / USD pair to reverse the previous day’s slide to a nearly two-week low.
The pa, for now, has broken two consecutive days of losing streak, although Any positive moves still seem elusive amid the worsening COVID-19 situation in Australia. In fact, the number of cases in Australia’s largest state by population, New South Wales, rose beyond 3,000 on Tuesday for the first time.
In addition, concerns about the possible economic consequences of the new variant of the coronavirus Omicron they could limit the bullish movement in the markets. Apart from this, the optimistic outlook from the Fed should act as a tailwind for the USD and prevent investors from opening aggressive bullish positions around the AUD / USD pair.
The fundamental backdrop favors the bears, although repeated failures to find acceptance below 0.7100 and the subsequent move up warrant some caution. In the absence of big economic releases on Tuesday, it will be wise to wait for a strong continuation buy before opening new bullish positions.
AUD / USD technical levels
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