- AUD/USD managed to regain positive traction on Thursday amid a subdued USD demand.
- The prevalent cautious mood might cap gains for the perceived riskier Australian dollar.
- Investors now look forward to US macro releases for some meaningful trading impetus.
The AUD/USD pair maintained its bid tone through the early European session and was last seen trading around the 0.7460 region, just below daily tops.
Following the previous day’s intraday pullback from a two-and-a-half-year high level of 0.7485, the pair managed to regain some positive traction on Thursday amid a subdued US dollar demand. The uptick, however, lacked any strong bullish conviction amid the prevalent cautious mood around the equity markets.
Stalled US stimulus talks raised doubts on whether the Republicans and Democrats can reach a consensus over the proposed a relief package. It is worth reporting that the US lawmakers approved a stopgap government funding bill on Wednesday, but were unable to reach a consensus over the latest stimulus measures.
This, in turn, dented investors’ confidence and might keep a lid on any strong gains for the perceived riskier Australian dollar. That said, the emergence of some dip-buying around the AUD/USD pair still favours bullish trades and supports prospects for an extension of over one-month-old, well-established bullish trend.
Market participants now look forward to the US economic docket, highlighting the releases of the latest consumer inflation figures and Initial Weekly Jobless Claims. The data, along with the US stimulus headlines, will influence the USD and produce some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch