- AUD / USD fails to capitalize on its positive intraday move to the 0.7775 region.
- The optimistic economic outlook for the United States underpins the USDD and limits the pair’s gains.
- Risk appetite sentiment could help limit the slide ahead of the FOMC on Wednesday.
The pair AUD / USD remains capped below the 0.7750 level at the start of the European session on Monday, after retreating from a high near 0.7775 to a low at 0.7720 during the Asian session.
The underlying bullish sentiment in the stock markets has maintained some support for the higher perceived risk Aussie and helped the AUD / USD pair to regain some positive traction on the first day of a new week. The rally received an additional boost after the release of better-than-expected Chinese industrial production and retail sales figures, which helped offset an unexpected rise in the unemployment rate and disappointing fixed asset investment data.
Meanwhile, growing market expectations about Relatively faster US economic recovery from the pandemic continued to prop up the US dollar. Investors remain optimistic about the US economic outlook amid the impressive vaccination rate for COVID-19 and the passage of a massive fiscal stimulus package in the US This, in turn, has limited any further gains for the AUD / USD pair and prompted some selling near the 0.7775 region.
That said, the decline remains supported, at least for now, as investors appear reluctant to open aggressive positions. ahead of this week’s FOMC monetary policy meeting. The Fed’s decision should influence US bond yields and play a key role in boosting the USD in the short term. This, in turn, could provide significant momentum and help investors determine the next directional move for the AUD / USD pair.
Meanwhile, broader market risk appetite sentiment and USD price dynamics could generate some trading opportunities amid the absence of relevant economic releases on Monday.
AUD / USD technical levels
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