AUD/USD jumps to fresh multi-week tops, around 0.7380 region

The AUD/USD pair edged higher through the Asian session on Friday and shot to the highest level since early September, around the 0.7380-85 region in the last hour.

The pair caught some fresh bids on the last day of the week and finally broke out of its overnight consolidative trading range amid a softer tone surrounding the US dollar. The optimism over the progress on remedies for the highly contagious coronavirus disease continued undermining the safe-haven greenback.

Meanwhile, concerns about the economic fallout from the continuous surge in COVID-19 cases resurfaced after Wednesday's unimpressive US macro data. The unexpected jump in the US Initial Jobless Claims raised expectation for more fiscal stimulus from the incoming Biden administration and exerted some additional pressure on the buck.

The USD was further pressured by a fresh leg down in the US Treasury bond yields. This, along with the prevalent upbeat market mood, further benefitted the perceived riskier Australian dollar and pushed the AUD/USD pair beyond the 0.7365-70 supply zone. This, in turn, might have already set the stage for additional near-term gains.

Hence, some follow-through strength beyond the 0.7400 mark, towards retesting September monthly swing around the 0.7415 region, now looks a distinct possibility. In the absence of any relevant macro data from the US, the broader risk sentiment will influence the USD price dynamics and produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch