AUD/USD: En-route fresh multi-month high above 0.7640, eyes US Senate updates

AUD/USD buyers catch a breather as the pair eases to 0.7605 amid the initial hour of Wednesday’s Asian trading. The quote defied Monday’s downbeat performance the previous day amid broad US dollar weakness on the American coronavirus (COVID-19) aid package developments. Though, cautious sentiment ahead of the final steps in the Senate triggered the latest pullback.

It’s worth mentioning that Wall Street benchmarks stepped back from record highs amid the recent risk-off mood but the US dollar index (DXY) bears flirt with the 90.00 mark to favor commodities and Antipodeans.

Republicans are the threat to Trump’s decision…

Although US President Donald Trump surprised global markets during the weekend while passing a $2,000 covid paycheck figure and the House backed the move too, Republican Party members have lined up to block the move in Capitol Hill during today’s voting. Considering the already disbursed $600 aid payment, the Congress members are set to decide on the additional $1,400 paycheck amount.

Recently, US Republican Senate Majority Leader McConnell rejected, by unanimous consent, Democrat’s request to back the transfer of an additional $1400 to each American. Doubts were also raised over US President Trump’s veto on the defense bill after the House overrode it the previous day while Senate members are up for questioning that move too.

As the limit to the US government funding is expiring soon, policymakers will be pushed to arrive at a decision. Even if they don’t, the US Labor Department said the government will pay unemployment benefits for the week of Dec. 27 despite President Trump signed the new stimulus bill after the program had lapsed. Hence, today’s result is likely to have a wider impact if being positive but may generate a kneejerk reaction in case of disappointment.

Also likely to keep the AUD/USD traders worries are the fears of the fast running covid figures in the UK and the US. Though, the vaccination process placates bears. On the other hand, the Brexit deal will be voted in the UK’s Parliament and is likely to have a smooth road considering PM Boris Johnson’s majority. Furthermore, rumors that China will be the only major country to grow in 2020 and lead the world in 2021 can also combat the year-end boredom amid a lack of major data/events.

Technical analysis

AUD/USD bull’s ability to keep the quote above key SMAs, starting from 5-day Simple Moving Average (SMA), joins upbeat momentum indicators to back expectations of witnessing another attempt to challenge June 2018 top of 0.7675.