AUD/USD holds steady near multi-year tops, just above mid-0.7500s

• The prevalent upbeat market mood extended some support to AUD/USD on Monday.
• COVID-19 vaccine optimism undermined the safe-haven USD and remained supportive.
• Investors might refrain from placing aggressive bets ahead of this week’s FOMC meeting.

The AUD/USD pair managed to rebound around 30 pips from Asian session lows and was last seen trading near the top end of its daily range, just above mid-0.7500s.

The pair attracted some fresh buying on the first day of a new trading week and remained well within the striking distance of a two-and-half-year top set on Friday. The prevalent upbeat market mood was seen as one of the key factors that benefitted the perceived riskier Australian dollar and lending some support to the AUD/USD pair.

The latest optimism over the rollout of vaccines for the highly contagious coronavirus diseases seemed to have revived hopes for a swift global economic recovery. It is worth reporting that an advisory panel to the US Food and Drug Administration on Thursday recommended approval of Pfizer’s COVID-19 vaccine for emergency use in the United States.

Adding to this, an extension of the post-Brexit trade talks beyond Sunday’s deadline further boosted investors’ confidence. This was evident from a fresh leg up in the global equity markets, which continued undermining the US dollar’s safe-haven demand and remained supportive of the intraday uptick witnessed around the AUD/USD pair.

The greenback was further pressured by worries about the potential economic fallout from the continuous surge in new COVID-19 cases and the imposition of new restrictions in several US states. Apart from this, expectations for additional US fiscal stimulus and further easing by the Fed further contributed to the selling bias surrounding the buck.

That said, investors might still refrain from placing aggressive bets, rather prefer to wait on the sidelines ahead of the latest FOMC monetary policy meeting later this week. In the meantime, the US stimulus headlines will influence the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch