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AUD/USD sits near session tops, just above mid-0.5900s

  • AUD/USD gains traction for the third straight session amid some heavy USD selling.
  • The Fed’s latest move, news of a deal on the coronavirus package weighed on the buck.
  • Concerns over the economic fallout from coronavirus pandemic might cap further gains.

The selling bias around the greenback remained unabated through the early European session and lifted the AUD/USD pair further beyond mid-0.5900s, or fresh daily tops.

The pair built on the previous day's intraday positive move from the 0.5700 mark and gained some follow-through traction on Tuesday amid some aggressive US dollar long-unwinding trade. The Fed on Monday announced unprecedented measures to buy unlimited amounts of Treasury bonds and mortgage-backed securities.

The Fed's latest move was followed by reports that the US Senate and the Trump administration were close to reaching a bipartisan agreement on the massive coronavirus spending package. This eventually weighed heavily on the USD and turned out to be one of the key factors behind the pair's positive move for the third straight session.

Meanwhile, the latest developments boosted investors' confidence and the same was evident from a strong bounce in the global equity markets. A goodish recovery in the global risk sentiment provided an additional boost to the perceived riskier currencies, like the Australian dollar, and remained supportive of the bid tone surrounding the major.

It, however, remains to be seen if bulls can capitalize on the move or the pair once again meets with some fresh supply near the key 0.60 psychological mark. Mounting fears over the economic fallout from the coronavirus pandemic might continue to benefit the USD's status as the global reserve currency and cap any strong gains.

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