- The AUD/USD has gained some strong positive traction, Monday, in the middle of the market optimism of the mood.
- The USD has declined more than three weeks-tops-and remained supportive of the move to the top.
- The worsening of US-China relations could keep a member on any strong rallies for China proxy, the aussie.
The intraday USD selling bias, picked up the pace in the last hour, and lifted the AUD/USD pair to fresh session and high, around-the-0.6470-80 in the region.
After showing some resilience near the 0.6400 round figure mark, the pair has taken some aggressive bids on Tuesday, and has been supported by a strong “risk-on” rally in global equity markets. The global risk sentiment remained well supported by the latest optimism on the easing or time restrictions in some parts of the world, and has received a further boost from hopes of additional stimulus measures.
The upbeat mood is undermined the U.S. dollar’s perceived safe-haven demand, and has proven to be one of the main factors that have provided a strong lift to the perception of riskier currencies, including the australian dollar. The USD extended Friday’s intraday decline in three weeks-tops-and seemed rather impressed by the Fed Chairman, and Jerome Powell’s optimistic comments about the U.S. economy during the last end of the week.
It, however, it remains to be seen if the pair is able to capitalize on the momentum or runs into some of the supply costs at higher levels, amid mounting fears concerning the second wave of corona virus infections. This, coupled with the worsening of US-China relations could still be “waiting” for investors to place all aggressive bullish bets around the China proxy in the Australian dollar, and the cap gains of the AUD/USD pair.
Even from a technical point of view, the pair is likely to confront resistance near the upper end of a one-week old descending trend channel, which coincides with the 100-day SMA important pivot point. In the absence of a principal market-moving economic releases, it will be prudent to wait for some strong follow-up to buy it before the contact a request to call for further short-term appreciation move.