AUD/USD consolidates recent gains to three-year tops, holds steady above 0.7900 mark

The AUD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range, just above the 0.7900 mark through the early European session.

The pair built on its recent upward trajectory and gained some traction during the early part of the trading action on Tuesday. The momentum was sponsored by the prevalent US dollar selling bias, albeit slightly overbought RSI on the daily chart kept a lid on any further gains for the AUD/USD pair.

The USD languished near six-week lows amid doubts about a relatively faster US economic recovery and was further pressured by the underlying bullish tone in the financial markets. The global risk sentiment remained supported by the progress in COVID-19 vaccinations and the US fiscal stimulus plan.

The House Budget Committee on Monday voted to advance the US President Joe Biden's proposed $1.9 trillion coronavirus stimulus package. This, in turn, pushed the yield on the benchmark 10-year US government bond to fresh one-year tops, though did little to provide any respite to the USD bulls.

That said, bulls took some breather and moved on the sidelines ahead of the Fed Chair Jerome Powell's testimony before the Senate Banking Committee. In the meantime, the Conference Board's US Consumer Confidence Index will influence the USD and produce some opportunities around the AUD/USD pair.

Technical levels to watch