- AUD/USD gained traction for the third consecutive session on Tuesday.
- Retreating US bond yields undermined the USD and remained supportive.
- The upbeat market mood further benefitted the perceived riskier aussie.
The AUD/USD pair held on to its intraday gains through the early European session and was last seen trading comfortably above the 0.7700 mark.
The pair built on last week’s bounce from the 0.7565 region, or over one-month lows and edged higher for the third consecutive session on Tuesday. The prevalent risk-on environment was seen as one of the key factors that undermined the US dollar’s relative safe-haven status and benefitted the perceived riskier aussie.
The global risk sentiment remained well supported by the progress in coronavirus vaccinations, which has been fueling hopes for a strong global economic recovery. Apart from this, developments to fast-track the US President Joe Biden’s proposed $1.9 trillion stimulus package further boosted investors’ confidence.
Meanwhile, Friday’s rather unimpressive US jobs report raised doubts about a relatively faster US economic recovery from the coronavirus pandemic. This, along with a turnaround in the US Treasury bond yields from the highest level since March 2020, weighed on the buck and provided an additional boost to the AUD/USD pair.
The pair shot to near two-week tops, albeit struggled to make it through a one-month-old descending trend-line resistance. This makes it prudent to wait for a sustained strength beyond the mentioned barrier before positioning for any further appreciating move amid absent relevant market-moving economic data from the US.
Technical levels to watch
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