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  • AUD/USD caught some aggressive bids on Tuesday and broke through the 0.7335-40 hurdle.
  • Dovish Fed expectations, the prevalent risk-on mood undermined the safe-haven greenback.
  • The global risk sentiment remained well supported by the optimism over COVID-19 vaccine.

The AUD/USD pair pushed through the 0.7335-40 supply zone and shot to the highest level since September 2 during the first half of the European session. The pair was last seen trading near 0.7360-65 region, up around 1% for the day.

A combination of supporting factors assisted the pair to catch some fresh bids on Tuesday and confirm a near-term bullish break through over one-week-old trading range. The US dollar remained depressed amid speculations for additional monetary easing by the Fed. This, along with the prevalent risk-on environment, provided an additional boost to the perceived riskier Australian dollar.

The global risk sentiment remained well supported by the latest optimism over a potential early rollout of vaccine for the highly contagious coronavirus disease. The upbeat market mood got an additional boost on news that the US President-elect Joe Biden was given the go-ahead to begin his White House transition, which further undermined the greenback’s relative safe-haven status.

Apart from this, Tuesday’s strong move up could further be attributed to some technical buying above the 0.7335-40 strong horizontal resistance. The fact that the AUD/USD pair has found acceptance above the mentioned barrier, bulls might now aim to reclaim the 0.7400 mark. The upward trajectory could further get extended towards YTD tops, around the 0.7415 region touched in August.

Market participants now look forward to the US economic docket, featuring the releases of the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index, due later during the early North American session. This, along with the broader market risk sentiment, will influence the USD price dynamics and assist traders to grab some short-term opportunities.

Technical levels to watch

 

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