The AUD/USD pair closed at 0.71496, after placing a high of 0.71496 and a low of 0.70796. Overall, the movement of AUD/USD pair has remained bullish throughout the year. The pair extended its gains of the previous day, rising to 0.71496, based on the weakness of the US dollar. The US Dollar Index, which tracks the US dollar’s performance against a basket of six other currencies, fell to 93.4 – the worst level in more than two years.

Despite the risk-off market sentiment, the AUD/USD pair moved upward, as the US dollar was weak across the board. The US dollar lost its safe-haven status after worries increased regarding an inconsistent economic recovery, amid rising numbers of coronavirus cases.

The rising number of coronavirus cases also raised hopes for a new stimulus package from the US Congress. There are expectations of an expansionary policy from the Federal Reserve, during its upcoming monetary policy meeting on Wednesday. FMC will also release its June’s policy meeting statement, and traders will keep an eye on that too.

Furthermore, the rising tensions between the US and China over the closure of consulates in Houston and Chengdu also raised tensions between the world’s two largest economies. These tensions limited additional gains in the AUD/USD currency pair.

Furthermore, the macroeconomic data from the US, on Core Durable Goods and Durable Goods Orders for June, was released at 17:30 GMT. The former came in at 3.3%, below the expectations of 3.5%, and the latter came in at 7.3%, exceeding the expectations of 7.0%.

Besides this, the number of US coronavirus cases crossed the 4 million mark, with the total number of deaths rising above 140,000. President Donald Trump is forced to allow schools to reopen in fall, and this has elevated fears of another round of the coronavirus, which would have a negative effect on the economy, weighing on the US dollar, and this added gains in the AUD/USD pair.

However, the hopes for global economic recovery raised the risk sentiment in the market, after news was released about progress in the development of a coronavirus vaccine. On Monday, the vaccine, which was co-developed by Moderna and the National Institute of Allergy and Infectious Diseases, started phase-3 trials in the US, with an expected enrollment of 30,000 volunteers. This risk sentiment gave strength to the AUD, which is perceived as risky, hence further gains for the AUD/USD pair.

Daily Technical Levels

Support Resistance

0.7107 0.7173

0.7063 0.7195

0.7040 0.7239

Pivot point: 0.7129

The AUD/USD has entered the overbought zone, surging sharply to trade at the 0.7147 level. Closing of a Doji candle suggests odds of a selling bias in the Aussie. On the lower side, the AUD/USD pair could drop to the 0.7120 level, while resistance remains at 0.7150. Let’s consider selling below 0.7180 and buying above 0.7064. Good luck!