- AUD/USD posts strong gains following Monday’s sharp drop.
- US Dollar Index stays deep in the negative territory around 92.00.
- Wall Street’s main indexes remain on track to open decisively higher.
Following a sharp decline that lasted for four days, the AUD/USD pair gained traction on Tuesday and advanced to a daily high of 0.7720 during the European trading hours before going into a consolidation phase. As of writing, the pair was up 0.7% on a daily basis at 0.7701.
Eyes on US stocks
The renewed selling pressure surrounding the USD allowed AUD/USD to stage a strong rebound. In the absence of significant fundamental drivers, the US Treasury bond yields’ performance continues to impact the greenback’s performance against its rivals.
At the moment, the benchmark 10-year US T-bond yield is losing 4% and the US Dollar Index is down 0.3% at 92.05.
Earlier in the day, the data from Australia showed that the National Australia Bank’s Business Confidence Index in February improved to 16 from 10 in January. Additionally, the Business Conditions Index rose to 15 from 7 during the same period. These upbeat figures seem to be helping the AUD gather strength against its peers.
In the meantime, Wall Street’s main indexes look to start the day decisively higher with the S&P 500 Futures rising nearly 1% ahead of the opening bell. If risk flows remain in control of the financial markets in the second half of the day, AUD/USD could extend its daily rally amid ongoing USD weakness.
Technical levels to watch for