AUD/USD advances beyond 0.7300 supported by risk flows

• AUD/USD gained traction ahead of the American session.
• Upbeat market mood helps AUD gather strength on Friday.
• US Dollar Index stays unchanged on the day near 93.30.

After spending the majority of the day fluctuating in a relatively tight range below 0.7300, the AUD/USD pair started to push higher and touched a daily top of 0.7316. As of writing, the pair was up 0.35% on the day at 0.7312. On a weekly basis, AUD/USD remains on track to close modestly higher. 

Coronavirus vaccine headlines keep the mood upbeat

The positive shift witnessed in the market mood during the European session seems to be helping the AUD gather strength. Pfizer and BioNTech announced on Friday that they will be seeking emergency-use authorization for their coronavirus vaccine from the US Food and Drug Administration (FDA) on Friday. Additionally, the companies noted that they have vaccines ready for delivery within hours after they receive approval.

Reflecting the risk-on market environment, major European equity indexes are up around 0.5% on the day and the S&P 500 Futures, which dropped as much as 0.4% earlier in the day, is flat.

On the other hand, the US Dollar Index edged lower and turned flat near 92.30 after climbing above 92.40 earlier in the day and allowed AUD/USD’s bullish momentum to remain intact. 

There won’t be any macroeconomic data releases from the US in the remainder of the day and the risk perception is likely to remain the primary driver of AUD/USD’s movements. If Wall Street’s main indexes manage to keep a firm footing ahead of the weekend, the greenback could continue to weaken against its rivals.

Technical levels to watch for