AUD/USD consolidates in a range, holds comfortably above 0.7400 mark

The AUD/USD pair lacked any firm directional bias and remained confined in a range, around the 0.7425-30 region through the Asian session on Monday.

A combination of diverging forces failed to provide any meaningful impetus to the major and led to a subdued/range-bound price action on the first day of a new trading week. The latest optimism over the rollout of a COVID-19 vaccine, along with positive trade data from China extended some support to the China-proxy Australian dollar.

However, a slight deterioration in the global risk sentiment drove some haven flows towards the US dollar and kept a lid on any meaningful upside for the AUD/USD pair. Reports that the US was preparing sanctions on at least a dozen Chinese officials turned out to be one of the key factors that held bulls from placing fresh bets.

That said, expectations that the US lawmakers will agree on a new coronavirus relief package should cap any meaningful upside for the greenback. Friday's disappointing headline NFP print added to worries about the potential economic fallout from the continuous surge in COVID-19 cases and boosted hopes for more US fiscal stimulus.

This, in turn, should attract some dip-buying around the AUD/USD pair and help limit any deeper losses. Meanwhile, the US stimulus headlines should continue to play a key role in influencing the USD price dynamics and assist traders to grab some short-term opportunities amid absent relevant market-moving economic releases.

Technical levels to watch