AUD/USD drops back towards 0.7100 amid fresh US dollar buying
- AUD/USD follows US dollar dynamics amid quiet trading.
- Risk sentiment sours on US stimulus woes, virus contagion.
- Focus remains on US stimulus news, sentiment on Wall Street.
Having faced rejection once again near the 0.7140 region, AUD/USD witnesses fresh selling wave and drops back towards the 0.7100 level on Monday, courtesy of the resurgent US dollar demand across the board.
The risk sentiment is seeing a fresh knockdown, as the Asian equities and US stock futures drop amid a pick-up in coronavirus contagion globally, with Europe worst-hit by the second wave. Investors scurry up to the safe harbor greenback also as the delay in reaching a US fiscal stimulus deal keeps them on the edge.
US House Speaker Nancy Pelosi continued to remain optimistic on the stimulus talks but it seems markets are not buying into the false hopes, as the odds of the US policymakers striking a deal before the November Presidential election is almost nil.
Further, the weakness in gold prices also undermines the sentiment around the resource-linked aussie while dovish RBA expectations keep the AUD bulls at bay.
Looking ahead, markets will closely follow fresh updates on the US stimulus negotiations and the sentiment on Wall Street amid a data-light US calendar.
AUD/USD technical levels
The next support is aligned at 0.7109/07 (100 and 10-DMA), below which the daily classic S3 at 0.7091 could be tested. To the upside, stiff resistance at 0.7138 (20-DMA) needs to be scaled for a test of the 50-DMA barrier at 0.7194.
AUD/USD additional levels