AUD/USD climbs to over 2-week tops, further beyond 0.7100 handle

   “¢   A subdued USD price action remains supportive of the positive momentum.
   “¢   A strong rally in Dalian iron ore provides an additional boost to the Aussie.
   “¢   Technical buying above 0.7100 mark further accelerates the bullish trajectory.

The AUD/USD pair caught some aggressive bids at the start of a new trading week and built on the momentum further beyond the 0.7100 handle.

After last week’s sharp intraweek pull-back, the pair regained positive traction on Friday and was being supported by some renewed US Dollar selling bias amid a fresh leg of a downfall in the US Treasury bond yields.  

With the USD bulls holding on the defensive, the prevalent risk-on mood underpinned the perceived riskier currency – Aussie and helped the pair to extend the positive momentum through the Asian session on Monday.

Adding to this, strong gains of nearly 2% in Dalian iron ore provided an additional boost to the commodity-linked Australian Dollar and remained supportive of the strong bid tone surrounding the major.

Meanwhile, possibilities of some near-term stops being triggered, leading to some fresh technical buying on a sustained move above the 0.7100 mark further contributed the ongoing bullish trajectory.  

There isn’t any major market-moving economic data due for release on Monday and hence, a move towards challenging 50-day SMA, currently near the 0.7135 region, now looks a distinct possibility.

Technical levels to watch

On a sustained move beyond the mentioned hurdle is likely to accelerate the up-move further towards the 0.7160-65 horizontal resistance, above which the pair is likely to aim towards reclaiming the 0.7200 handle. On the flip side, the 0.7100-0.7095 region now becomes immediate support to defend, which if broken might prompt some long-unwinding trade and drag the pair back towards testing the 0.7065-60 support area.