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  • AUD/USD benefits risk-on mood-led USD weakness, China PMI.
  • RBA keeps monetary policy settings unchanged in Dec.
  • Focus shifts to US ISM PMI, vaccine updates and Australian Q3 GDP.

AUD/USD has eased from daily highs of 0.7373, as the recovery from multi-day lows of 0.7339 falters ahead of the critical US data.

The sentiment around the higher-yielding aussie, however, remains buoyed by the market optimism, courtesy of the positive coronavirus vaccine developments, which imply that a swift economic recovery is in the offing.

The vaccine-driven upbeat market mood combined with the strong Chinese Caixin Manufacturing PMI data downs the haven demand for the US dollar, adding to the upside in the spot. The Chinese factory activity expanded at the fastest pace in a decade last month, the latest data published by Caixin showed Tuesday.

The risk rally in the global stocks, especially with the S&P 500 futures up nearly 1%, firms up the bullish undertone in AUD/USD. The bulls now await the critical US ISM Manufacturing PMI data and Fed Chair Jerome Powell’s testimony to take on the further upside.

Also, in focus remains the RBA Governor Phillip Lowe’s speech and Australian Q3 GDP report due on Wednesday for a fresh impetus. Meanwhile, markets also keep an eye on the Australian-Sino trade tensions and vaccine updates.

Earlier today, the RBA left its key rate and QE purchases unadjusted while showing its readiness to do more if the post-pandemic economic recovery falters. The decision had little impact on the aussie dollar.

AUD/USD technical levels

Acceptance above the horizontal 21-simple moving average (SMA) at 0.7372 on the four-hour chart is critical to challenging the multi-month tops above 0.7400. The Relative Strength Index (RSI) points north while above the midline, allowing more room to the upside. Alternatively, the 50-SMA at 0.7341 is strong support.

AUD/USD additional levels