The AUD/USD closed at 0.77738 after placing a high of 0.77772 and a low of 0.76865. The AUD/USD pair recovered on Tuesday after the US dollar came under fresh pressure due to the US’s rising political risks.
The risk-sensitive Aussie gained traction on Tuesday despite the rising risk-off mood in the market. The risk sentiment suffered on Tuesday as the FBI told that it had received information indicating armed protests were being planned at all 50 state capitols and Washington. These comments also weighed on the US dollar that ultimately added to the AUD/USD pair’s rising prices on Tuesday.
On the other hand, the greenback was weak during Tuesday as the US Dollar Index that measures the value of the US dollar against the basket of six major currencies fell to 90.20 level and supported the upward momentum in AUD/USD pair. The risk-off market sentiment was also supported by the rising number of coronavirus cases and the increased tougher restrictions across the world to curb coronavirus spread. Meanwhile, the 10-year US Treasury yields were up by almost 2% on Tuesday, suggesting that DXY’s downside will remain limited if yields continued to rise.
On the data front, there was no macroeconomic data to be released from Australia. While From the US side, at 16:00 GMT, the NFIB Small Business Index for December fell to 95.9 against the expected 100.1 and weighed on the US dollar that ultimately added in the gains of AUD/USD pair. At 20:00 GMT, the JOLTS Job Openings for November rose to 6.53M against the anticipated 6.42M and supported the US dollar that capped further gains in AUD/USD pair. At 20:02 GMT, the IBD/TIPP Economic Optimism came in line with the anticipations of 50.1.
From China, the M2 Money Supply for the year dropped to 10.1% against the forecasted 10.7% and weighed on China-proxy Aussie that capped further upside in AUD/USD pair. The New Loans from China raised to 1260B against the forecasted 1250B and supported China-proxy Aussie that added AUD/USD pair gains.
On Tuesday, Donald Trump’s administration said that it gave millions of coronavirus vaccine doses that it had been keeping back for second shots and encouraged states to offer them to all Americans above age 65 or with persistent health conditions. These comments added in the risk sentiment and supported risk perceived Aussie that ultimately added the AUD/USD pair’s upward momentum.
Daily Technical Levels
Pivot point: 0.7711
The AUD/USD pair jas formed a symmetric triangle pattern, supporting a selling bias in the pair. On the 2 hour timeframe, the Aussie is likely to find support at the 0.7722 level along with a resistance level of 0.7776. The MACD and RSI support selling bias, whereas the 10 & 20 periods EMA are suggesting selling bias. The AUD/USD is showing a bearish crossover on the two-hourly timeframes, supporting a selling bias. Let’s consider taking a sell trade below 0.7760 today. Good luck!