AUD/USD extends the bounce above 0.7750 as USD bulls take a breather

• AUD/USD benefits from a pause in the US dollar’s rebound.
• Treasury yields hold firmer on Biden’s $2 trillion stimulus plan.
• Further upside depends on the US data, Powell and Biden’s speech.

AUD/USD has caught a fresh bid-wave in the last hours, now extending the bounce above 0.7750 amid a pause in the US dollar rebound, as markets await fresh trading impetus.

In Thursday’s Asian trading, President-elect Joe Biden’s expected stimulus of about $2 trillion saved the day for the Treasury yields, as they rebounded sharply and drove the US dollar higher alongside.

The fresh burst of bids in the greenback downed the AUD/USD pair to near 0.7730 before the bulls fought back control amid the uptick in the S&P 500 futures and Asian equities. Further, better-than-expected Chinese Trade Balance data also aided the recovery in the aussie.

Heading into the European session, the US dollar bulls take a breather, as the dust settles in the aftermath of Biden’s likely bigger stimulus plan while the focus shifts towards the weekly US employment data and the Fed Chairman Jerome Powell’s speech.

Amid the recent chatter about reducing the Fed’s bond-buying, Powell’s comments could draw significant attention. However, Biden’s speech due at 0015 GMT on Friday will hold the key for fresh direction on the prices.

AUD/USD technical levels