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AUD / USD rises to new daily highs and recovers above the 0.7300 level

  • AUD / USD draws some lower buying on Wednesday amid renewed USD sell bias.
  • Concerns about the rise in COVID-19 cases in the US keep USD bulls on the defensive.
  • A softer risk appetite tone could limit any wild movements in the AUD, perceived as a higher risk asset.

The pair AUD/USD it has managed to bounce around 50 pips from the intraday lows and has risen to new daily highs, around the region of 0.7320, at the start of the European session on Wednesday.

The pair has captured some buying at lower levels, near the 0.7270 region, and for now it appears to have stopped its retracement from the 0.7340 resistance zone reached the previous day. The good intraday rebound is solely due to the prevailing selling bias around the US dollar.

Concerns about Possible economic consequences of the new coronavirus restrictions in several US states. They have made up for the latest optimism around promising vaccine trials. This, in turn, has kept USD bulls on the defensive and it has been seen as a key factor driving the AUD / USD pair higher.

Meanwhile, nervousness around COVID-19 has taken its toll on global risk sentiment, which has been evident by weaker business sentiment in the stock markets. A softer feeling of risk could limit the rise of the Australian dollar, currency of higher perceived risk, and warrants caution for bulls.

This makes it prudent to wait for some solid continuation buying, possibly above the 0.7340 resistance zone, before investors start to position themselves for any further short-term bullish movement for the AUD / USD pair.

Market participants are now awaiting the release of US housing market data, with building permits and housing starts that could generate some momentum at the start of the American session. This, along with developments around the coronavirus saga and broader market risk sentiment, will influence USD price dynamics and generate some significant trading opportunities around the AUD / USD pair.

 

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