AUD/USD jumps to multi-week tops, eyeing 0.6600 mark ahead of FOMC minutes

• AUD/USD continued gaining traction for the third consecutive session on Wednesday.
• The upbeat market mood weighed on the safe-haven USD and remained supportive.
• The technical set-up favours bullish traders and supports prospects for additional gains.

The AUD/USD pair quickly reversed an early European session dip to the 0.6530-25 region and refreshed daily tops in the last hour. The pair was last seen trading near the 0.6575-80 region, just a few pips away from the 2-1/2-month-high set on Tuesday.

As investors looked past Wednesday’s a record fall in the Australian monthly retail sales, the pair managed to regain some traction and turned higher for the third consecutive session. The momentum was supported by a subdued US dollar price action, possibly on the back of a weaker tone surrounding the US Treasury bond yields and a goodish pickup in the US equity futures.

Despite doubts over a potential COVID-19 vaccine, strong corporate earnings provided a strong boost to the US equity futures. In fact, the S&P 500 index future was up around 1%, which weighed on the greenback’s relative safe-haven status. This, in turn, was seen as one of the key factors that underpinned demand for perceived riskier currencies, like the aussie.

Wednesday’s positive move comes on the back of the overnight sustained move beyond 100-day SMA, around the key 0.6500 psychological mark, and supports prospects for a further near-term appreciating move. Hence, a move towards reclaiming the 0.6600 mark, en-route the 0.6635-40 supply zone, now looks a distinct possibility.

Later during the US session, the release of the minutes of the latest FOMC meeting will influence the USD price dynamics and produce some trading opportunities. Meanwhile, the RBA Governor Philip Lowe is due to participate in a panel discussion on Thursday, which might further contribute towards providing a meaningful directional impetus.

Technical levels to watch