AUD/USD: Bulls battle 0.7550 amid cautious optimism

• AUD/USD wavers around the mid-0.7500s after a week-start gap-up of nearly 15-pips.
• Brexit, vaccine news recently lifted the mood, uncertainty over US stimulus, virus woes probe the bulls.
• Iron ore’s record high, US dollar weakness keeps the bulls hopeful amid a light calendar.

AUD/USD keeps the upside gap from Friday’s close while taking rounds to 0.7550 amid the initial Asian session on Monday. The aussie pair began the week’s trading with the gap-up of close to 15-pips from 0.7536 as market players witnessed welcome news from the Brexit front. Also favoring the mood could be the coronavirus (COVID-19) vaccine-related stories that battle the US covid aid stimulus headlines.

Having conveyed their “far apart” Brexit status during the last week, UK PM Boris Johnson and the European Commission President Ursula von der Leyen agreed to “go the extra mile” by continuing talks into this week. However, fears of no-deal Brexit aren’t off the table as British PM Johnson reiterates, “I’m afraid we’re still very far apart on some issues.”

Elsewhere, the US Food and Drug Administration (FDA) authorized Pfizer and BioNTech’s jointly developed coronavirus vaccine for emergency use (EUA) during late-Friday and bolstered the vaccine hopes.

Also on the positive side could be the update from CNN’s Senior Congressional Correspondent Manu Raju who tweeted,

Furthermore, the record high of iron ore contracts on the Dalian Commodity Exchange also favors the AUD/USD bulls. Iron ore is Australia’s main export item that recently crossed the $150 mark for the most active contract.

It should, however, be noted the recall of local lockdowns in the US, as well as Germany’s national lockdown, amid the COVID-19 resurgence keep the bulls chained. Additionally, the Aussie-China tussle offers extra negative for the AUD/USD traders.

Looking forward, a light calendar in Asia will keep highlighting the risk news, mainly relating to the covid, the US aid package and the Brexit, for fresh impulse. However, the surge in commodity prices and the Canberra-Beijing tension will keep providing the background music.

Technical analysis

An upward sloping trend line from December 31, 2019, at 0.7577 now, test the AUD/USD bulls amid overbought RSI conditions, which in turn favor odds of a pullback. However, the sellers are less likely to enter unless the quote slips below the August 31 top of 0.7416.