- A dovish USD demand helps AUD / USD regain some positive traction on Tuesday.
- The rally in US bond yields should help limit the USD’s slide and limit the pair’s gains.
The pair AUD/USD is extending its steady positive intraday move and has risen to new daily highs, around the region of 0.7725-30, at the start of the European session on Tuesday.
The pair has managed to regain some positive traction and has recovered a portion of the previous day’s losses to near the week-long lows, around the region of 0.7660-55. The AUD / USD pair, for now, appears to have halted its recent corrective decline from multi-year highs and is being supported by subdued demand for the US dollar during the first half of trading action on Tuesday.
Apart from this, the underlying bullish sentiment around global financial markets, amid hopes for additional stimulus in the United States, has provided an additional boost to the perceived riskier Australian dollar. Investors have been weighing the prospects for more aggressive tax spending in 2021 after the Democratic victory in the US Senate runoff elections in Georgia.
Meanwhile, the expectations of Higher government borrowing has continued to drive US Treasury yields higher. This, in turn, should help limit any significant decline in the USD and limit the rise of the AUD / USD pair.. This makes it prudent to wait for some subsequent buying before investors begin to position themselves for the resumption of the pair’s recent uptrend.
There is no major economic data release from the United States on Tuesday. Therefore, broader market risk sentiment and US bond yields will continue to play a determining role in influencing USD price dynamics. This, along with developments related to the coronavirus saga, should help investors seize some short-term opportunities.
AUD / USD technical levels
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