AUD/USD: Bulls battle 0.7550 amid cautious optimism

AUD/USD wavers around the mid-0.7500s after a week-start gap-up of nearly 15-pips.
Brexit, vaccine news recently lifted the mood, uncertainty over US stimulus, virus woes probe the bulls.
Iron ore’s record high, US dollar weakness keeps the bulls hopeful amid a light calendar.

Anil Panchal FXStreet

AUD/USD keeps the upside gap from Friday’s close while taking rounds to 0.7550 amid the initial Asian session on Monday. The aussie pair began the week’s trading with the gap-up of close to 15-pips from 0.7536 as market players witnessed welcome news from the Brexit front. Also favoring the mood could be the coronavirus (COVID-19) vaccine-related stories that battle the US covid aid stimulus headlines.

Having conveyed their “far apart” Brexit status during the last week, UK PM Boris Johnson and the European Commission President Ursula von der Leyen agreed to “go the extra mile” by continuing talks into this week. However, fears of no-deal Brexit aren’t off the table as British PM Johnson reiterates, “I’m afraid we’re still very far apart on some issues.”

Elsewhere, the US Food and Drug Administration (FDA) authorized Pfizer and BioNTech's jointly developed coronavirus vaccine for emergency use (EUA) during late-Friday and bolstered the vaccine hopes.

Also on the positive side could be the update from CNN’s Senior Congressional Correspondent Manu Raju who tweeted,

The bipartisan group of House and Senate negotiators has made a decision: Separate their proposal into two packages, per sources. One bill will be a $748B proposal, which includes money for small business loans, jobless benefits and vaccine distribution - among other matters.
— Manu Raju (@mkraju) December 13, 2020

The other: A package that includes $160 billion for state and local aid that includes liabilty protections for businesses and other entities - the two biggest sticking points. It’s uncertain how many senators and House members from the group will sign onto the second proposal
— Manu Raju (@mkraju) December 13, 2020

Furthermore, the record high of iron ore contracts on the Dalian Commodity Exchange also favors the AUD/USD bulls. Iron ore is Australia’s main export item that recently crossed the $150 mark for the most active contract.

It should, however, be noted the recall of local lockdowns in the US, as well as Germany’s national lockdown, amid the COVID-19 resurgence keep the bulls chained. Additionally, the Aussie-China tussle offers extra negative for the AUD/USD traders.

Looking forward, a light calendar in Asia will keep highlighting the risk news, mainly relating to the covid, the US aid package and the Brexit, for fresh impulse. However, the surge in commodity prices and the Canberra-Beijing tension will keep providing the background music.

Technical analysis

An upward sloping trend line from December 31, 2019, at 0.7577 now, test the AUD/USD bulls amid overbought RSI conditions, which in turn favor odds of a pullback. However, the sellers are less likely to enter unless the quote slips below the August 31 top of 0.7416.

Additional important levels

Overview
Today last price	0.7553
Today Daily Change	17 pips
Today Daily Change %	0.23%
Today daily open	0.7536

Trends
Daily SMA20	0.7381
Daily SMA50	0.7245
Daily SMA100	0.7226
Daily SMA200	0.69

Levels
Previous Daily High	0.7572
Previous Daily Low	0.752
Previous Weekly High	0.7572
Previous Weekly Low	0.7372
Previous Monthly High	0.7438
Previous Monthly Low	0.699
Daily Fibonacci 38.2%	0.754
Daily Fibonacci 61.8%	0.7552
Daily Pivot Point S1	0.7513
Daily Pivot Point S2	0.749
Daily Pivot Point S3	0.746
Daily Pivot Point R1	0.7566
Daily Pivot Point R2	0.7595
Daily Pivot Point R3	0.7618

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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