The AUD/USD pair closed at 0.71589, after placing a high of 0.71766 and a low of 0.71125. Overall, the movement of the AUD/USD pair remained bullish throughout the day. The AUD/USD pair edged lower during the first half of the day, but gained traction during the next half, as the US dollar once again came under pressure.

Although the greenback gained traction against its rivals, with the US Dollar Index rebounding to 94.00 on Tuesday, it failed to attract investors after the Fed announced that it would extend its lending facilities until the end of 2020. After the Fed’s statement, the US Treasury bond yields turned south, and the US dollar index also fell. The consumer sentiment data deteriorated in July, with the CB Consumer Confidence Index dropping to 92.6, from 98.3 in June.

The Richmond Manufacturing Index for July increased to 10, from the previous 0,exceeding the expectations of 5, which supported the US dollar. However, the S&P/CS Composite-20 HPI dropped to 3.7% in May, against the expected 4.1%, and compared with the previous month’s 3.9%, which also weighed on the dollar.

On the Aussie front, the Australian Inflation data for the second quarter will be released on Wednesday, and it is expected to plunge to record levels of -2.0% from 0.3% in the previous quarter. Worse-than-anticipated numbers could take their toll on the Aussie. On the other hand, upbeat numbers could push it above the 0.7182 level.

Furthermore, the Australian dollar was also high on Tuesday, amid the improving risk sentiment, based on coronavirus vaccine hopes. The pharma firms from around the world are working on the development of treatments and vaccines. Companies like Moderna, Pfizer, and AstraZeneca are all pushing to get their vaccines across the line, which means that there are multiple roads to success, and the chances that they will be successful are also high.

The Aussie gained on the back of positive news from most of the vaccine developing firms from around the world, as a successful vaccine will lead to quick economic recovery. Meanwhile, the ongoing US-China tensions kept the pair’s gains under pressure on the day.

Daily Technical Levels

Support Resistance

0.7120 0.7185

0.7084 0.7214

0.7055 0.7250

Pivot point: 0.7149

The AUD/USD has entered the overbought zone, as it surged sharply, to trade at the 0.7177 level. Closing of Doji candles 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 0.7180. Let’s consider selling below 0.7180 and buying above 0.7064. Good luck!