AUD/USD jumps above 0.7400 amid US dollar pullback, ahead of data

  • AUD/USD breaks lower amid a mixed market mood.
  • US-China talks and Australian covid woes weigh on the spot.
  • A broadly subdued US dollar limits the downside in the aussie.

AUD/USD is on a steady recovery, as it regains the 0.7400 level, helped by a modest pullback in the US dollar across the board.

Markets have turned a bit cautious, dragging the US Treasury yields lower while limiting the upside attempts in the American dollar.

Meanwhile, the aussie appears to ignore the extension of covid lockdowns in New South Wales and the latest news that Melbourne is going into a seven-day lockdown.

The sentiment around the greenback continues to drive the aussie pair, as it recovers from a sharp sell-off to 0.7370 lows, hit after Fed Vice-Chair Richard Clarida’s hawkish comments and stronger US ISM Services PMI triggered a spike in the US dollar across the board.

Clarida’s comments hinted at QE tapering by the end of this year while the focus now shifts towards the US weekly Jobless Claims and broader market sentiment will direct the moves in the aussie.

AUD/USD: Technical levels

“AUDUSD meets minor resistance at 7410/20. Holding here in the short term sideways trend targets 7360/70, perhaps as far as 7320/15 before a retest of the July low at 7297/87. We topped exactly resistance at 7410/20. Expect strong resistance at 7435/45. Shorts need stops above 7455. A break higher is a medium-term buy signal,” Jason Sen at DayTradeIdeas.com.

AUD/USD: Additional levels

FX

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