AUD/USD clings to intraday gains above 0.7700 mark, lacks follow-through

AUD/USD regained positive traction on Tuesday amid renewed USD selling.
The risk-on mood was seen as a key factor weighing on the safe-haven USD.
Rallying US bond yields extended some support to the USD and capped gains.

Haresh Menghani FXStreet

The AUD/USD pair held on to its modest daily gains, albeit seemed struggling to build on the momentum. The pair was last seen trading around the 0.7710-15 region, up 0.45% for the day.

The pair regained positive traction on Tuesday, snapping two consecutive days of the losing streak and recovered the overnight losses to near two-week lows. The prevalent upbeat market mood prompted some fresh selling around the safe-haven US dollar and was seen as one of the key factors that benefitted the perceived riskier Australian dollar.

Against the backdrop of the optimism over the COVID-19 vaccine rollouts, the already stronger global risk sentiment got an additional boost from the increasing likelihood of more US fiscal stimulus. The market bets increased further after reports indicated that US Treasury Secretary nominee Janet Yellen will urge lawmakers to act big to a protracted downturn.

Meanwhile, expectations of a larger government borrowing, along with the risk-on flow triggered a fresh leg up in the US Treasury bond yields. This, in turn, extended some support to the USD and kept a lid on any strong gains for the AUD/USD pair. Investors might also prefer to wait on the sidelines ahead of President-elect Joe Biden's inaugural ceremony on Wednesday.

This makes it prudent to wait for some strong follow-through buying before positioning for any further gains amid absent relevant market moving economic releases. That said, Yellen's comments might influence the USD price dynamics. This, along with the broader market risk, might further contribute to produce some meaningful trading opportunities around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7713
Today Daily Change	0.0027
Today Daily Change %	0.35
Today daily open	0.7686

Trends
Daily SMA20	0.7686
Daily SMA50	0.7518
Daily SMA100	0.7348
Daily SMA200	0.7098

Levels
Previous Daily High	0.7758
Previous Daily Low	0.7658
Previous Weekly High	0.7806
Previous Weekly Low	0.7665
Previous Monthly High	0.7743
Previous Monthly Low	0.7338
Daily Fibonacci 38.2%	0.7697
Daily Fibonacci 61.8%	0.772
Daily Pivot Point S1	0.7644
Daily Pivot Point S2	0.7601
Daily Pivot Point S3	0.7544
Daily Pivot Point R1	0.7743
Daily Pivot Point R2	0.78
Daily Pivot Point R3	0.7843

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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