AUD/USD clings to daily gains around 0.7570 supported by risk flows
- AUD/USD is trading in the positive territory on Monday.
- USD struggles to find demand amid risk flows.
- Focus shifts to Chinese data and RBA Meeting Minutes.
The AUD/USD pair gained nearly 100 pips last week and continues to push higher on Monday. As of writing, the pair was up 0.5% on a daily basis at 0.7571 and was a few pips away from the 30-month high it set at 0.7574 on Friday.
The AUD seems to be capitalizing on risk flows on Monday. Coronavirus vaccine optimism and heightened hopes for a Brexit deal provide a boost to risk-sensitive assets and weigh on the safe-haven greenback.
The US Dollar Index is currently losing 0.25% on the day at 90.55. The strong performance of the S&P 500 Futures suggests that the selling pressure surrounding the greenback is likely to remain intact in the second half of the day.
Eyes on RBA Meeting Minutes
On Tuesday, the Reserve Bank of Australia (RBA) will release the December Meeting Minutes. Furthermore, Industrial Production and Retail Sales data from China will be looked upon for fresh impetus. At the moment, major US stock futures are up between 0.4% and 0.7%.
In a recently published article, Westpac analysts said they expect the RBA to extend the quantitative easing program beyond June in 2021 with another $100 billion in committed purchases. If the RBA's publication hints at the bank's willingness to move in that direction, the AUD could struggle to preserve its strength.
Technical levels to watch for