AUD/USD’s upside attempts remain limited below 0.7145/60

• AUD/USD bounces up and stalls below 0.7160.
• The Aussie pares losses as the USD pulls back.
• The pair remains trapped between 0.7100 and 0.7160.

The Australian dollar was supported above 0.7100 following a weak performance on Monday and the pair managed to erase losses on Tuesday, although upside moves remain capped below the 0.7145/60 area

The Aussie ticks up with the USD pulling back

The aussie has taken advantage of USD’s retreat, amid a mild improvement on the market sentiment following a strongly risk-averse session on Monday. US equity markets popped up into positive territory after a moderately negative opening, with US durable goods orders and housing prices posting larger than expected increases.

Before that, the speakers from the Reserve Bank of Australia provided some support to the AUD. RBA Deputy Governor Debelle tiptoed around the issue of further monetary easing and affirmed that the impact of COVID-19 in Victoria will be smaller than previously expected.

The positive reaction, however, has been short-lived. Concerns about the global increase of coronavirus cases and the uncertainty about the US elections are keeping traders on a cautious mood, reluctant to maintain long-term positions.

AUD/USD stalled between 0.7100 and 0.7160

From a technical perspective, the aussie remains neutral, trapped in a range between 0.7100 and 0.7145/60. On the upside, a confirmation above 0.7160 (October 23 high) would have to extend above the 50-day SMA, at 0.7195 before heading to 0.7235 (October 12 high)

On the downside, below 0.7100 (October 23, 26 lows and 100-day SMA), bearish momentum might increase and push the pair towards 0.7025 (October 20 low) and 0.7000 (September 25 low).