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  • AUD/USD witnessed some profit-taking on Friday amid near-term overbought conditions.
  • A softer risk tone benefitted the safe-haven USD and was seen exerting pressure on the pair.
  • Optimism over COVID-19 vaccines, Brexit deal, US fiscal stimulus might cap the USD recovery.

The AUD/USD pair edged lower through the Asian session and slipped back below the 0.7600 mark, or fresh daily lows in the last hour.

The pair witnessed some long-unwinding on the last trading day of the week and has now eroded a major part of the previous day’s strong gains to the highest level since June 2018. The pullback lacked any obvious fundamental catalyst and could be solely attributed to some profit-taking amid near-term overbought conditions.

A slight deterioration in the global risk sentiment – as depicted by a softer tone around the equity markets – prompted some short-covering around the safe-haven US dollar. This, in turn, was seen as one of the key factors that drove flows away from the perceived riskier Australian dollar and exerted pressure on the AUD/USD pair.

That said, the progress on additional US fiscal stimulus measures could keep a lid on any meaningful recovery for the greenback. This, along with the optimism over COVID-19 vaccine rollouts and hopes for a last-minute Brexit deal, might further hold the USD bulls from placing aggressive bets and help limit the fall for the AUD/USD pair.

Hence, the ongoing corrective slide is more likely to attract some dip-buying at lower levels amid absent relevant market moving economic releases. Meanwhile, the broader market risk sentiment and US stimulus headlines might continue to influence the USD, which should help traders to grab some short-term opportunities around the AUD/USD pair.

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