AUD/USD eases from multi-week tops, still well bid around 0.7340-35 ahead of US data

The AUD/USD pair quickly retreated around 30 pips from daily swing highs, albeit has still managed to hold with decent intraday gains around the 0.7340 region.

The pair caught aggressive bids on Tuesday and jumped to the highest level since September 2 amid the emergence of some fresh selling around the US dollar. Increasing bets for additional monetary easing by the Fed in December continued exerting some pressure on the greenback through the first half of the trading action.

Meanwhile, prospects for an early rollout of vaccine for the highly contagious disease remained supportive of the upbeat market mood. This, in turn, further undermined the greenback's safe-haven demand and benefitted the perceived riskier Australian dollar, pushing the AUD/USD pair through the 0.7335-40 supply zone.

Despite the negative factors, the greenback managed to find some support at lower levels amid a modest pickup in the US Treasury bond yields. A modest USD rebound seemed to be the only factor that prompted some profit-taking around the AUD/USD pair, though the pullback lacked any strong follow-through and seems limited.

Even from a technical perspective, Tuesday's positive move confirmed a near-term bullish breakthrough a one-week-old trading range and might have already set the stage for an extension of the upward trajectory. Hence, any meaningful corrective slide might still be seen as a buying opportunity near the 0.7300 mark.

Moving ahead, the US economic docket – featuring the releases of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index – will now be looked upon for some short-term trading impetus. The key focus, however, will be on Wednesday's release of the latest FOMC policy meeting minutes.

Technical levels to watch