AUD/USD climbs to session tops, eyeing to reclaim 0.6900 mark
- AUD/USD witnessed some follow-through selling on Friday amid broad-based USD strength.
- The prevailing risk-on mood trade optimism helped regain some positive traction on Monday.
- The upside seems more likely to remain limited on the back of a holiday in the US markets.
The AUD/USD pair regained some positive traction on the first day of a new trading week and recovered a part of the previous session's slide to one-week lows.
The pair extended the previous session's pullback from the 0.6935 region and witnessed some follow-through selling for the second consecutive session on Friday amid broad-based US dollar strength to fresh monthly tops.
The greenback remained supported by the incoming positive economic data, which added to expectations that the US economy will continue to expand and reduced odds of any further rate cuts by the Fed.
The risk-on mood helped limit the downside
The pair weakened back below the very important 200-day SMA and settled near the lower end of its weekly trading range, around the 0.6870 level, albeit the prevalent risk-on mood helped limit further losses.
The recent optimism over US-China phase one trade deal remained supportive of the bullish sentiment across the global equity markets and extended some support to perceived riskier currencies – like the aussie.
Further gains, however, are likely to remain limited amid relatively lighter turnover on the back of a holiday in the US – in observance of Martin Luther King Day – and absent relevant market-moving economic data.
Hence, it will be prudent to wait for a sustained move back above the 0.6900 round-figure mark before traders again start placing any fresh bullish bets and positioning for any further near-term appreciating move for the major.
Technical levels to watch