AUD / USD returns near session highs, bulls expect a move past 0.7400

• The emergence of some selling around the USD helped the AUD / USD to regain initial lost ground.
• Disappointing US durable goods orders weighed further on the USD.
• The nervousness of COVID-19 and a generally softer risk tone could limit gains for the Australian dollar perceived as riskier.

The pair AUD/USD It recovered more than 40 pips from the daily lows and rose again approaching the daily highs, around the 0.7375-80 region.

Having found some support near the 0.7335-30 region, the AUD / USD pair attracted some buying on Tuesday and has now approached the upper end of the multi-day trading range also perceived as resistance. The US dollar struggled to capitalize on its modest intraday gains amid a sharp intraday decline in US Treasury yields and extended some support to the AUD / USD pair.

Intraday USD sales accelerated in the early hours of the US session in reaction to disappointing data for US durable goods orders In fact, major orders posted a modest growth of 0.8% in June versus 2.1 % expected. Additionally, orders excluding transportation items also disappointed market expectations and increased 0.3% during the reported month.

That said, an overall weak tone in equity markets could act as a tailwind for the safe-haven dollar. Concerns that the spread of the highly contagious Delta variant of the coronavirus could derail the global economic recovery continued to weigh on investor sentiment. This, in turn, could limit any significant gains for the Australian dollar perceived as riskier.

Investors could also refrain from aggressive bets ahead of this week’s key risk event – the FOMC monetary policy meeting. Even from a technical perspective, the AUD / USD pair has been struggling to pull back above 0.7400. Also, this makes it wise to wait for some solid follow-up buys before making any new bullish bets.

Technical levels