AUD/USD spikes to fresh one-week tops, beyond mid-0.7100s

The intraday selling bias surrounding the greenback pushed the AUD/USD pair beyond mid-0.7100s, or fresh one-week tops in the last hour.

The pair managed to attract some dip-buying near the 0.7100 round-figure mark and built on this week's goodish rebound from four-week lows, around the 0.7020 region touched on Tuesday. The positive momentum was exclusively sponsored by the emergence of some fresh selling around the US dollar since the early European session.

Despite the uncertainty over the next round of the US fiscal stimulus measures, the news of the first approved treatment for the highly contagious coronavirus disease boosted investors' confidence. This was evident from an uptick in the equity markets, which undermined the safe-haven USD and benefitted the perceived riskier aussie.

It is worth reporting that Gilead Sciences received US FDA approval on Thursday for its antiviral therapy to treat the virus. Adding to this, growing expectations of a strong Democratic victory in the upcoming US elections on November 3 remained supportive of the upbeat market mood and weighed on traditional safe-haven assets.

Apart from this, the latest leg of a sudden spike over the past hour or so could further be attributed to some technical buying above the 0.7130-35 resistance zone. That said, it will still be prudent to wait for some follow-through buying to see if the uptick marks a near-term bullish breakout or turns out to be a stop run.

Meanwhile, expectations that the RBA will cut interest rates in November might hold bulls from placing any aggressive bets and keep a lid on any runaway rally for the AUD/USD pair, at least for the time being. This further warrants some caution for aggressive bullish traders and positioning for any further near-term appreciating move.

Technical levels to watch