- AUD / USD breaks three days of gains amid a nice rally in USD demand.
- The underlying bullish tone in the markets could help limit any further losses for the perceived riskier AUD.
- Investors are now waiting for US data for some significant business opportunities.
The pair AUD/USD maintains its selling tone during the first half of the European session, struggling near daily lows just above the 0.7250 region.
The pair has suffered some selling on Thursday and for now, seems to have broken three consecutive days of earnings amid a good rebound in demand for the US dollar. The recent sharp rise in U.S. Treasury yields has acted as a tailwind for the USD, which in turn has been seen as a key factor putting some pressure on the AUD / USD.
Investors seem convinced that the Fed could still begin to reduce its massive asset purchases in 2021 amid optimism that the Delta variant of the coronavirus will not derail the economic recovery. The United States Food and Drug Administration (FDA) granted full approval to Pfizer / BioNTech’s vaccine for COVID-19 and raised hopes that vaccination in the United States could be accelerated.
In addition to this, America’s leading infectious disease expert, Dr. Anthony Fauci, said that covid-19 could be under control early next year and further increased investor confidence. That said, the underlying bullish sentiment in financial markets could limit gains for the safe-haven USD and help limit any further losses for the perceived riskier AUD.
Investors may also be reluctant to open aggressive positions and prefer to wait on the sidelines. before Fed Chairman Jerome Powell’s speech, at the Jackson Hole Symposium. This warrants some caution before confirming that the recent rebound from the 0.7100 region, at annual lows, has run out of steam.
Meanwhile, on Thursday’s economic calendar in the United States, the publications of the Second quarter GDP (second estimate) and weekly jobless claims, which could give AUD / USD some boost. Apart from this, the broader market risk sentiment could also generate some significant trading opportunities around the pair.
AUD / USD technical levels
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