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AUD/USD eases from weekly tops, still comfortable above 0.6700 mark

  • AUD/USD gains some follow-through traction for the third consecutive session on Wednesday.
  • Concerns over the economic impact of coronavirus, stronger USD kept a lid on any strong gains.

The AUD/USD pair held on to its daily gains and is currently placed near weekly tops, comfortably above the 0.6700 round-figure mark.

The prevailing risk-on environment continued lending some support to the perceived riskier Australian dollar and assisted the pair to build on this week's recovery move from over a decade low. The pair gained some follow-through traction for the third consecutive session on Wednesday, albeit concerns about the outbreak of coronavirus held investors from placing any aggressive bullish bets around the China-proxy aussie.

Stronger USD seemed to cap gains

This coupled with some renewed US dollar buying interest further collaborated towards capping any runaway rally for the major. As investors looked past the Fed Chair Jerome Powell's semi-annual testimony, worries about the economic impact of the deadly virus drove some safe-haven flows towards the greenback. The already stronger USD was further supported by a goodish pickup in the US Treasury bond yields.

Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have already bottomed out in the near-term and positioning for any further near-term appreciating move. Moving ahead, market participants now look forward to Powell's second day of testimony, this time before the Senate Housing Committee, in order to grab some short-term trading opportunities.

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