AUD/USD steadies around 0.7170, looks to register small daily gains
- AUD/USD erases major portion of daily gains during American session.
- US Dollar Index remains on track to close second straight day higher.
- Upbeat market mood helps AUD stay resilient against its rivals.
The AUD/USD pair rose above 0.7200 earlier in the day but struggled to preserve its momentum as the USD started to gather strength during the American session. After erasing a large part of the daily gains, the pair seems to have stabilized around 0.7170 and remains on track to close the day modestly higher.
DXY rebounds above 93.20
Following the US FDA's authorization to use antibody-rich blood plasma treat patients infected with COVID-19, markets turned risk-positive at the start of the week. The greenback struggled to find demand as a safe-haven and the US Dollar Index (DXY) dropped below 93.00.
However, the risk-on environment helped the US Treasury bond yields gain traction and provided a boost to the USD. With the DXY turning positive on the day above 93.20, AUD/USD reversed its course and retraced its daily advance. At the moment, the 10-year US T-bond yield is up nearly 2% and the DXY looks to end the second straight trading in the positive territory.
On Tuesday, the market action in the Asian session is likely to be choppy. In the second half of the day, New Home Sales, Richmond Fed Manufacturing Index and Conference Board Consumer Confidence Index data will be featured in the US economic docket. Later in the week, FOMC Chairman Jerome Powell's speech at the Jackson Hole Symposium will be watched closely by investors.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
