The AUD/USD closed at 0.72149 after placing a high of 0.72271 and a low of 0.71629. Overall the movement of AUD/USD pair remained bullish throughout the day. The pair AUD/USD extended its gains on Monday and reached near 0.72300 level amid broad-based US dollar weakness and increased risk sentiment.
The US dollar was weak because of the delayed US fiscal stimulus package as the House of Congress left Washington on a month-long recess on Thursday without reaching a consensus on the next US stimulus measure.
When the previous stimulus has expired, and the next round of stimulus is awaiting, a delay in the decision would only harm the US economic recovery. Democrats have denied compromising until the other party Republicans shown some compromise on their side. Democrats have been asking for a $3 trillion USD package, while Republicans have argued the amount was huge and offered a $1 trillion package.
In the meantime, US President Donald Trump has signed executive orders to extend the coronavirus relief aid. He has also directed US Secretary States Steven Mnuchin to make a direct payment of $3400 to four families. This has shown his willingness to pass the next stimulus relief without the approval of Congress. However, the delay has weighed heavily on the US dollar, and it has proved to be beneficial for the AUD/USD pair on Monday.
On the US-China front, the US-China tensions escalated after the US Commerce Department announced that it added 38 Huawei affiliates in the US blacklist on Monday. However, the fact that the US gave some time before publishing the review of the US-China phase-one trade deal to increase the US purchases that were the part of the agreed deal.
This provided some strength to the risk sentiment and kept the risk perceived Aussie in demand and added in the currency pair gains. On the data front, the Empire State Manufacturing Index declined to 3.7 from the expected 14.6 and weighed o US dollar that added further in the gains of AUD/USD pair.
Daily technical Levels
Pivot point: 0.7201
The AUD/USD is trading with a bullish bias at 0.7243 level, facing immediate resistance at 0.7243 level. On the 4 hour timeframe, the AUD/USD pair is likely to face resistance at 0.7243 level. Above 0.7243 level, the next resistance is expected to be found around 0.7280 level. On the lower side, the support stays at 0.7190. The symmetric triangle pattern has already been violated, and the 50 periods EMA is supporting the upward movement in the market. Let's wait to trade breakout of 0.7243 level. Good luck!