AUD/USD climbs to four-day tops, just below 0.7300 mark amid weaker USD
- AUD/USD gained follow-through traction for the third successive session on Monday.
- The ongoing USD retracement slide was seen as a key factor driving the pair higher.
- A combination of factors might cap the upside ahead of the RBA decision on Tuesday.
The AUD/USD pair climbed to four-day tops during the mid-European session, with bulls now eyeing to reclaim and build on the momentum beyond the 0.7300 mark.
The pair built on last week's goodish rebound from the 0.7170 region, or over one-month lows and gained traction for the third consecutive session on Monday. Bulls took cues from the ongoing US dollar retracement slide from one-year tops, though a combination of factors might keep a lid on any meaningful gains for the AUD/USD pair.
Worries that Evergrande Group's debt crisis could spread to China's entire property sector tempered investors' appetite for perceived riskier assets. This was evident from a generally weaker tone around the equity markets. This might lend some support to the safe-haven greenback and act as a headwind for the perceived riskier Australian dollar.
Apart from this, firming expectations that the Fed would begin tapering its bond purchases as soon as November and raise interest rates in 2022 should help limit the USD losses. This makes it prudent to wait for a strong follow-through buying before placing aggressive bullish bets around the AUD/USD pair amid absent relevant market-moving macro data.
Even from a technical perspective, the AUD/USD pair has repeatedly failed the 0.7310-15 supply zone. This further warrants some caution for bullish traders ahead of the RBA monetary policy update on Tuesday. Traders might also refrain from positioning for any firm direction as the focus remains on the US monthly jobs report on Friday.
Technical levels to watch