AUD/USD rallies to the highest level since Feb. 2019, around 0.7235 region

The AUD/USD pair climbed further beyond the 0.7200 round-figure mark and shot to the highest level since February 2019 during the early North American session.

The pair added to the previous day's positive move and gained some strong follow-through traction for the second consecutive session on Wednesday amid some heavy US dollar selling bias. Investors remain worried that the ever-increasing coronavirus cases could undermine the US economic recovery, which, in turn, kept exerting downward pressure on the greenback.

Adding to this, the impasse over the next round of the US fiscal stimulus further dented the already weaker sentiment surrounding the buck. It is worth reporting that the US lawmakers have been struggling to agree on the coronavirus relief package, though White House negotiators have vowed to work around the clock to reach a deal by the end of this week.

On the economic data front, the ADP report came in to show that private-sector employment in the US increased by 167K in July as against 1500K expected. Separately, the US ISM Non-Manufacturing PMI unexpectedly jumped to 58.1 in July as compared to consensus estimates pointing to a modest pullback to 55 from the 57.1 previous, albeit did little to impress the USD bulls.

Apart from a broad-based USD weakness, possibilities of some short-term trading stops being triggered on a sustained move beyond the 0.7200 round-figure mark further collaborated to the AUD/USD pair's strong positive move. Meanwhile, oscillators on hourly charts are flashing overbought conditions and warrant some caution before placing fresh intraday bullish bets.

Hence, a possible near-term consolidation or a modest pullback towards the 0.7200 mark cannot be ruled out. That said, the dip might still be seen as a buying opportunity, which, in turn, should help limit any meaningful corrective slide for the AUD/USD pair, at least for the time being.

Technical levels to watch