AUD/USD approaches 0.75 on USD sell-off

The AUD/USD pair sustained its bullish momentum into the NA session as the greenback remained under pressure against its major rivals, and refreshed its highest level since May 3. As of writing, the pair is trading a few pips below its session high at 0.7483, up 0.3% on the day.

After failing to hold on to its recovery gains above the 97 handle, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, dropped to its lowest level at 96.70 since the election-day spike back in early November. As of writing, the index was at 96.80, up 0.2% on the day. Although the Chicago Fed National Activity Index (CFNAI) showed an improvement in April, it was largely ignored as the main focus remains on the political turmoil in the U.S.

• US: Chicago Fed National Activity Index points to increased economic growth in April

Furthermore, led by the rising crude oil prices, both the European and Asian equity indexes recorded gains on Monday, leading up to a strong start for the American stocks as well. At the moment, the Dow Jones Industrial Average is up 0.4% on the day, while the S&P 500 Index is gaining 5.75 points, or 0.25%, further boosting the demand for the commodity-linked Aussie.

• US stocks jump during opening hour, Fedspeaks in focus

Technical outlook

The pair could encounter the initial resistance at 0.7500 (psychological level), ahead of 0.7555 (20-WMA) and 0.7610 (Apr. 17 high). On the downside, supports are located at 0.7430 (20-DMA), 0.7330 (May 9 low) and 0.7285 (Jan. 6 low).