- AUD/USD gains some follow-through traction for the second consecutive session on Tuesday.
- Improving global risk sentiment, a modest USD pullback remained supportive of the move up.
The intraday selling bias around the greenback lifted the AUD/USD pair to one-week tops, with bulls now eyeing a move towards reclaiming the 0.6200 round-figure mark.
The pair added to the overnight gains and gained some strong follow-through traction for the second consecutive session on Tuesday. The uptick was supported by a combination of factors, including a sharp turnaround in the global risk sentiment and a modest US dollar pullback.
Investors turned optimistic amid a slowdown in the number of new coronavirus cases in Italy, Spain and the centre of the US outbreak – New York. This was evident from a positive mood around the equity markets and provided a modest lift to perceived riskier currencies – like the aussie.
The risk-on flow drove flows away from the greenback’s perceived safe-haven status and contributed to the pair’s ongoing positive momentum. The Australian dollar got an additional boost from the latest RBA monetary policy decision to leave its official cash rate at a record low of 0.25%.
It, however, remains to be seen if the pair is able to capitalize on the momentum or runs into some fresh supply at higher levels. Mounting fears about an imminent global recession might continue to underpin the USD’s demand as the global reserve currency and keep a lid on any runaway rally.
In the absence of any major market-moving economic releases from the US, the pair remains at the mercy of the broader market risk sentiment and the USD price dynamics. Apart from this, fresh developments surrounding the coronavirus saga might further infuse some volatility across the financial markets and produce some meaningful trading opportunities.
Technical levels to watch
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