- AUD/USD gains traction for the second consecutive session on Tuesday.
- Aussie benefits from expectations of more stimulus by China, risk-on mood.
- The uptick seemed unaffected by sustained USD buying, dismal aussie data.
The AUD/USD pair edged higher for the second consecutive session on Tuesday and is currently placed at two-day tops, comfortably above the 0.6700 round-figure mark.
The pair added to the previous session’s modest gains and recovered further from over a decade low set last Friday. The uptick seemed rather unaffected by concerns over the economic impact of the deadly coronavirus and softer domestic data – National Australia Bank’s Business Confidence for January.
It is worth reporting that the death toll in China rose to more than 1,000 on Tuesday and more than 42,000 people have been infected. The growing number of fatalities is causing worries that the outbreak has yet to peak, though did little to prompt any fresh selling around the China-proxy aussie.
Bulls even shrugged off sustained buying interest surrounding the US dollar, rather took cues from the expected new round of economic stimulus measures by China. This coupled with the prevailing risk-on mood extended some additional support to perceived riskier currencies, including the Australian dollar.
It will now be interesting to see if the pair is able to capitalize on the recovery momentum or runs out of the steam at higher levels. The focus now shifts to the Fed Chair Jerome Powell’s semiannual testimony, which will influence the near-term USD price dynamics and provide a fresh directional impetus.
Technical levels to watch