AUD/USD surrenders early modest gains, holds steady above mid-0.7100s

• AUD/USD regained positive traction on Monday amid a rebound in the equity markets.
• The intraday uptick ran out of the steam ahead of the 0.7200 mark, warranting caution.
• The US ISM Non-Manufacturing PMI eyed for some impetus ahead of RBA on Tuesday.

The AUD/USD pair surrendered a major part of its Asian session positive move and was last seen hovering near the lower end of its daily range, around the 0.7165-70 region.

The pair caught some fresh bids on the first day of a new trading week and recovered the previous day's modest losses amid a strong rebound in the equity markets. Positive news about Trump’s coronavirus infection boosted investors' confidence, which undermined the US dollar's safe-haven status and benefitted the perceived riskier Australian dollar.

The uptick, however, lacked any strong follow-through buying and ran out of the steam ahead of the 0.7200 round-figure mark. A goodish pickup in the US Treasury bond yields, coupled with the US political uncertainty ahead of the presidential election on November 3rd helped limit any deeper losses for the greenback and capped gains for the AUD/USD pair.

Moving ahead, market participants now look forward to the US macro data for some impetus later during the early North American session. Monday's US economic docket highlights the release of ISM Non-Manufacturing PMI, which might influence the USD price dynamics and produce some short-term trading opportunities.

Investors also await the upcoming vice president presidential debate on Wednesday. In the meantime, the broader market risk sentiment will continue to play a key role in driving the AUD/USD pair ahead of the latest RBA monetary policy update, scheduled to be announced during the Asian session on Tuesday.

Technical levels to watch