AUD/USD consolidated in a range above 0.7700 mark, US PMI/Powell's speech eyed
- AUD/USD attracted some buying on Monday and stalled its recent slide from the 0.7815-20 area.
- Dovish Fed expectations, the risk-on mood undermined the USD and extended some support.
- Investors now eye US ISM PMI, Powell’s speech for some impetus ahead of the RBA on Tuesday.
The AUD/USD pair held on to its modest gains through the first half of the European session and was last seen hovering near the top end of its intraday trading range, around the 0.7725-30 region.
Having shown some resilience below the 0.7700 mark, the pair edged higher on the first day of a new week and recovered a part of Friday's decline to one-week lows. The AUD/USD pair, for now, seems to have stalled its recent sharp pullback from the 0.7815-20 heavy supply zone and was supported by a combination of factors.
The US dollar struggled to capitalize on last week's rebound from the lowest level since February 26 amid expectations that the Fed will keep interest rates low for a longer period. This, along with the prevalent risk-on mood, further undermined the safe-haven greenback and extended some support to the perceived riskier aussie.
The uptick marked the first day of a positive move in the previous three trading session, though lacked any strong follow-through. Investors now seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the latest monetary policy update by the RBA, scheduled during the Asian session on Tuesday.
In the meantime, the US economic docket – featuring the release of the ISM Manufacturing PMI – will be looked upon for some impetus. Apart from this, a scheduled speech by Fed Chair Jerome Powell will influence the USD price dynamics and further contribute to producing some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch