- AUD/USD remains on track to finish the day in the positive territory.
- US Dollar Index stays deep in the red around 91.10.
- Wall Street’s main indexes push lower at the start of the week.
The AUD/USD pair reached its highest level in a month at 0.7785 on Monday but started to erase its gains in the second half of the day. As of writing, the pair was trading at 0.7755, where it was still up 0.28% on a daily basis.
Earlier in the day, the unabated selling pressure surrounding the greenback allowed AUD/USD to preserve its bullish momentum. However, the modest rebound witnessed in the benchmark 10-year US Treasury bond yield and the poor performance of Wall Street’s main indexes helped USD limit its losses during the American trading hours.
Currently, the US Dollar Index (DXY) is losing 0.55% on a daily basis at 91.10. Meanwhile, the Nasdaq Composite and the S&P 500 indexes are down 1.3% and 0.7%, respectively.
In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will release the minutes of its April meeting. There won’t be any other macroeconomic data releases from Australia and the USD’s market valuation alongside risk perception are likely to continue to drive AUD/USD’s movements.
AUD/USD near-term outlook
UOB Group analysts think that AUD/USD could struggle to break above 0.7785 amid overbought conditions. “Looking ahead, the next resistance is at 0.7820,” analysts added. “A break of 0.7670 would indicate that the upside risk has dissipated.”
Additional levels to watch for