AUD/USD is currently trading at 0.7277 having travelled between a range of 0.7318 and a low of 0.7260, somewhat under pressure from both a technical and fundamental perspective

The dollar held broad gains on Thursday as investors tempered bullish expectations about a COVID-19 vaccine. It looks like U.S. dollar gets some support from the recent comments of Senate Majority Leader Mitch McConnell, who stated that a huge corona virus aid package was not needed and that he would prefer to see a highly targeted bill.U.S. Government bond yields continue to increase, and the yield on 10-year notes is already close to 1.00%. The rising yield on dollar-denominated debt provides some support to the American currency.

At some point, the U.S. Fed may want to intervene and stop the rising yields, implementing a policy that is similar to the one which has been recently announced by the Reserve Bank of Australia.

National Australia Bank’s head of foreign exchange strategy, Ray Attril said that “I think we had a speculative market that was increasingly comfortable being short U.S. dollars.” “Then we had the vaccine news and a big spike in U.S. bond yields, which I think just acted as a little bit of a check on unbridled U.S. dollar bearishness,” he said.

If the market maintains the opinion that the Federal Reserve will remain uber easy and that under a Democratic ruling at the White House, fiscal stimulus will be pumped to higher than potentially anticipated levels, a move out of USDs and into high yield currencies is likely to lend support to the commodity complex, including the Aussie

On the other hand, the Aussie has recently felt some pressure from the RBA’s extended policy measures which could continue to be felt over the coming weeks.

AUD/USD 4 Hour Chart:

Support: 0.7253 (S1), 0.7227 (S2), 0.7195 (S3).

Resistance: 0.7311 (R1), 0.7343 (R2), 0.7369 (R3).

Amidst all the prevailing catalysts supporting dollar against Aussie, We expect a bearish trend for AUD/USD.