- AUD/USD managed to regain positive traction on Tuesday amid renewed USD selling bias.
- Progress on US stimulus boosted investors’ confidence and undermined the safe-haven USD.
- Relatively thin liquidity conditions warrant some caution before placing any fresh bullish bets.
The AUD/USD pair edged higher during the Asian session and was last seen hovering near the top end of its daily range, just below the 0.7600 mark.
Following the previous day’s modest pullback from one-week tops, the pair managed to regain positive traction on Tuesday and was being supported by the emergence of some fresh US dollar selling. Progress on additional US stimulus remained supportive of the upbeat market mood, which, in turn, undermined the greenback’s relative safe-haven status.
In fact, the House of Representatives voted to increase the amount of stimulus checks to qualified Americans from $600 to $2,000 on Monday. This comes on the back of the latest optimism over a last-minute Brexit deal, which further boosted investors’ confidence and benefitted perceived riskier currencies, including the Australian dollar.
The AUD/USD pair is now be looking to build on the momentum further beyond the 0.7600 round-figure mark, though year-end thin trading volumes might hold bulls from placing aggressive bets. This makes it prudent to wait for some follow-through buying beyond weekly tops, around the 0.7620-25 area, before positioning for any further appreciating move.
There isn’t any major market-moving economic data due for release on Tuesday. Hence, the US stimulus headlines will play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment, might further contribute to produce some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch
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