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  • AUD/USD regained positive traction for the third consecutive session on Monday amid weaker USD.
  • News that Trump signed US aid bill added to the Brexit optimism and boosted investors’ confidence.
  • A modest uptick in the US bond yields helped limit the USD fall and might cap gains amid thin liquidity.

The AUD/USD pair held on to its modest Asian session gains and was last seen hovering near one-week tops, just above the 0.7600 round-figure mark.

The pair quickly reversed an intraday dip to the 0.7585 region and turned positive for the third consecutive session on Monday. News that the US President Trump has signed a $2.3 trillion COVID-19 relief and government funding bill added to the latest Brexit optimism.

The positive developments boosted investors’ confidence, which was evident from the prevalent bullish trading sentiment around the equity market. This, in turn, undermined the US dollar’s safe-haven demand and provided a modest lift to the perceived riskier Australian Dollar.

However, a goodish pickup in the US Treasury bond yields helped limit any deeper losses for the greenback. This, along with holiday-thinned trading conditions, held bulls from placing aggressive bets and might keep a lid on any runaway rally for the AUD/USD pair.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further appreciating move. In the absence of any major market-moving economic releases, the AUD/USD pair is more likely to consolidate its recent gains to multi-year tops.

Technical levels to watch