AUD/USD trades in tight range below 0.7400 ahead of mid-tier US data

After closing the previous week in the positive territory, the AUD/USD pair rose to its highest level since September 1st at 0.7408 in the early tradi  |  30/11/2020 14:27
  • AUD/USD consolidates last week's gains below 0.7400 on Monday.
  • US Dollar Index continues to edge lower at the start of the week.
  • Investors await mid-tier macroeconomic data releases from the US.

After closing the previous week in the positive territory, the AUD/USD pair rose to its highest level since September 1st at 0.7408 in the early trading hours of the Asian session on Monday. However, the pair struggled to preserve its bullish momentum and seems to have gone into a consolidation phase near 0.7380.

DXY extends last week's slide

The data from China showed on Monday that the economic activity in the manufacturing and service sectors expanded at a robust pace in November and helped the China-proxy AUD gather strength at the start of the week.

In the meantime, the greenback struggled to find demand on Monday and the US Dollar Index (DXY) slumped to its lowest level in more than 30 months at 91.55. Although the DXY staged a rebound and rose above 91.70 during the European session, it turned south ahead of mid-tier data releases from the US and allowed AUD/USD to limit its losses.

October Pending Home Sales, the ISM Chicago PMI and the Dallas Fed Manufacturing Business Index will be featured in the US economic docket. Meanwhile, Wall Street's main indexes remain on track to start the day modestly lower and a cautious market mood could cause AUD/USD to start edging lower. 

On Tuesday, the AiG Performance of Manufacturing Index and the Commonwealth Bank Manufacturing PMI will be released from Australia. 

Technical levels to watch for

 

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