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  • AUD/USD is trading in a tight range on Tuesday.
  • US Dollar Index is staying below 93.00 ahead of American session.
  • Data from Australia showed improvement in Business Confidence.

The AUD/USD pair climbed to its highest level since mid-September at 0.7341 on Monday but erased a large portion of its gains to close below 0.7300. In the absence of significant fundamental drivers on Tuesday, the pair is moving sideways around 0.7280.

DXY steadies below 93.00

On Monday, the risk rally that was triggered after Pfizer announced that its coronavirus vaccine was more than 90% effective helped the AUD gather strength. However, surging US Treasury bond yields in the second half of the day provided a boost to the greenback and made it difficult for the pair to preserve its bullish momentum.

Earlier in the day, the data from Australia showed that the National Australia Bank’s Business Confidence improved to 5 in October from -4 in September but was largely ignored by the market participants. As of writing, the US Dollar Index (DXY) was virtually unchanged on the day at 92.87.

The only data featured in the US economic docket will be the NFIB Business Optimism Index on Tuesday. Meanwhile, investors will keep a close eye on Wall Street’s performance. After surging to a new all-time high at the opening bell on Monday, the S&P 500 Index closed more than 1% higher. However, the S&P 500 futures are posting modest daily losses at the moment, suggesting that US stocks could go into a consolidation phase. 

Technical levels to watch for