- AUD/USD traded with a mild positive bias for the fourth consecutive session on Wednesday.
- The risk-on mood undermined the safe-haven USD and benefitted the perceived riskier aussie.
- A modest uptick in the US bond yields did little to impress USD bulls or provide any impetus.
The AUD/USD pair edged higher during the early European session and refreshed two-week tops, around the 0.7745 region in the last hour.
The pair built on its recent bounce from over one-month lows, around the 0.7565 region touched last week and traded with a positive bias for the fourth consecutive session on Wednesday. The uptick was supported by the prevalent upbeat market mood, which weighed on the safe-haven US dollar and benefitted the perceived riskier aussie.
The underlying bullish sentiment in the financial markets remained well supported by the optimism over the progress in COVID-19 vaccination. This, along with the likelihood for a massive US fiscal spending, has been fueling hopes for a strong global economic recovery from the coronavirus pandemic and continued boosting investors’ confidence.
The greenback was further undermined by doubts over a relatively faster US economic recovery, especially after the release of Friday’s unimpressive US jobs report. The market also seems divided about the impact of the US President Joe Biden’s proposed $1.9 trillion stimulus package on the greenback. This was evident from the fact that a modest uptick in the US Treasury bond yields failed to provide any respite to the USD bulls.
Apart from this, Wednesday’s positive move could further be attributed to some technical buying following the overnight breakthrough a one-month-old descending trend-line resistance. That said, the lack of any strong follow-through strength warrants some caution for bulls and before positioning for any further near-term appreciating move.
Market participants now look forward to the US economic docket, highlighting the release of the latest consumer inflation figures, for some impetus. This, along with the broader market risk sentiment, might influence the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch
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