The AUD/USD pair was closed at 0.75324 after placing a high of 0.75779 and a low of 0.75243. After placing gains for three consecutive days, the AUD/USD pair dropped on Monday despite the market’s risk flows. After rising above the highest level since June 2018, the AUD/USD pair saw heavy technical selling in the market. The pair reached above the 0.75700 level and faced heavy selling pressure as the investors started to take profits from their trades. The profit-taking overshadowed the market’s risk flows, and the pair AUD/USD continued falling on Monday.
The risk sentiment was improved on Monday due to the latest vaccine rollout in the US and Canada after the UK. The US started giving Pfizer and BioNtech vaccine doses to nurses and health officials on Monday as it provides a 95% efficacy rate against the coronavirus.
The vaccine rolls out raised hopes that the global economic recovery will soon begin as the coronavirus will become less of a threat. This optimism raised the risk sentiment in the market but failed to impress the risk-sensitive Aussie buyers.
The risk sentiment was also supported by the latest hopes that the US coronavirus stimulus bill will be released soon to support the US economy from the coronavirus impact. The US dollar also came under pressure as the coronavirus cases, and the death toll from COVID-19 surpassed 300,000 number. The US dollar weakness could not impress the AUD/USD buyers, and the pair continued its bearish movement on Monday.
Meanwhile, the AUD/USD pair was under pressure on Monday as Biden has said that he will not remove the tariffs on Chinese products by Trump immediately. The President-elect nominated Katherine Tail for the role of US trade representative said on Friday that she was the trade enforcer against China’s unfair trade practices that will be a key priority in the Biden-Harris administration. It was a sign that Donald trump’s trade war will continue, which weighed on the China-Proxy Australian dollar and added losses in the AUD/USD pair on Monday.
Daily Technical Levels
Pivot point: 0.7547
The AUD/USD is trading sideways at 0.7515, but it’s supported by an upward trendline that can be seen in the 2-hour timeframe. On the higher side, the AUD/USD is forming a double top level at 0.7527, which is now extending resistance. The leading technical indicators such as MACD and RSI support the buying trend, while the 50 periods EMA is also supporting the AUD/USD pair at 0.7515. Let’s consider buying over 0.7515 level to capture quick 40 pips. Good luck!