AUD/USD consolidates in a range near multi-week tops, above mid-0.7300s
|- AUD/USD remained confined in a range through the Asian session on Thursday.
- Dismal domestic data kept a lid on any meaningful gains for the Australian dollar.
- The downside remains limited amid the latest optimism over a COVID-19 vaccine.
The AUD/USD pair was seen oscillating in a range, above mid-0.7300s and consolidated its recent gains to the highest level since early September.
The pair failed to capitalize on the overnight goodish bounce of around 50 pips and remained confined in a narrow band through the first half of the trading action on Thursday. The disappointing release of Australia's Private Capital Expenditure, coming in to show a contraction of 3% during the third quarter of 2020, capped the upside for the AUD/USD pair.
However, the latest optimism over a potential COVID-19 vaccine and clarity on the US political front undermined the US dollar's relative safe-haven status. This, along with Wednesday's softer US macro releases, further weighed on the greenback and turned out to be one of the key factors that extended some support to the AUD/USD pair, at least for the time being.
Data released on Wednesday showed that the number of Americans filing for unemployment insurance unexpectedly jumped to 778K during the week that ended on November 20. The downbeat report indicated that imposition of new 19 restrictions was undermining the labor market recovery and fueled worries about the potential economic fallout from rising coronavirus cases.
Adding to this, the minutes of the November 4-5 FOMC meeting revealed that policymakers debated a range of options on bond purchases to support the economic recovery. The minutes did little to dampen prospects for additional monetary easing by the Fed in December and further contributed to the prevalent selling bias surrounding the greenback.
That said, investors seemed reluctant to place any aggressive bets amid relatively thin liquidity conditions on the back of the Thanksgiving holiday in the US. This makes it prudent to wait for some strong follow-through buying before traders start positioning for any further near-term appreciating move for the AUD/USD pair, possibly beyond the 0.7400 mark.
Technical levels to watch
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