AUD / USD with modest losses, still holding above 0.7250

• AUD / USD is moving lower on Friday and returns a portion of the previous day’s gains to multi-week highs.
• The prevailing cautionary sentiment is driving some money flows into the safe haven USD and putting some pressure on the pair.
• Investors await US political developments and the NFP report before opening new directional positions.

The pair AUD/USD moves with a slight negative bias at the start of the European session on Friday, although it lacks strong continuation selling and remains comfortably above the 0.7250 level.

The pair has moved lower on the last trading day of the week and has returned a portion of the previous day’s strong gains to the 0.7300 zone, on a six-week high. A modest pullback in US stock index futures has fueled some safe-haven money flows to the US dollar, which in turn has been seen as a key factor putting some pressure on the AUD / USD pair.

The markets bet the Democratic candidate Joe Biden to become the next president of the United States. However, the end result of the exciting US elections remains unclear and depends on the vote count in some of the remaining states on the battlefield. Waiting for results and high uncertainty keeps investors nervous.

Meanwhile, the fact that Republicans will retain control of the Senate it has dashed hopes for large fiscal stimulus packages to support the economy in the short term. The combination of factors has weighed on investor sentiment and was evidenced by the prevailing cautious sentiment in financial markets, which has benefited traditional safe haven assets such as the USD.

That said, the decline remains limited, at least for the time being, as investors now seem reluctant to position themselves for a big move in either direction. ahead of Friday’s release of US monthly employment data. The NFP report, along with US political developments, will influence USD price dynamics and could generate some significant trading opportunities.