AUD/USD sticks to Australian GDP-led gains near 0.7330-35 area, two-week tops

• Upbeat Australian GDP print assisted AUD/USD to gain traction for the second straight day.
• The risk-on environment also benefitted the perceived riskier aussie and remained support.
• A strong pickup in the US bond yields revived the USD demand and capped any further gains.

The AUD/USD pair held on to its modest intraday gains through the early European session and was last seen hovering near two-week tops, around the 0.7330-35 region.

Following the previous day's modest pullback, the AUD/USD pair regained positive traction for the second successive day following the release of the better-than-expected Australian GDP report. Data from the Australian Bureau of Statistics (ABS) showed that the domestic economy expanded 0.7% in the three months to June as against 0.5% expected.

The annualized figures also surpassed market expectations and came in to show a growth of 9.6%. Adding to this, growth for the previous quarter was also revised marginally higher to 1.9% from 1.8% reported earlier. This, along with the underlying bullish sentiment in the financial markets, acted as a tailwind for the perceived riskier aussie.

That said, a modest pickup in the US dollar demand held bulls from placing any aggressive bets and kept a lid on any further gains for the AUD/USD pair, at least for the time being. The US Treasury bond yields built on the previous day's goodish rebound, which, in turn, was seen as a key factor that helped ease the bearish pressure around the USD.

From a technical perspective, the 0.7330 area marks a previous strong horizontal support breakpoint and should act as a key pivotal point for short-term traders. A sustained move beyond might trigger a fresh bout of the short-covering move and allow the AUD/USD pair to aim back to reclaim the 0.7400 round-figure mark.

Market participants now look forward to the US economic docket, highlighting the release of the ADP report on private-sector employment and ISM Manufacturing PMI. This, along with the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and produce some trading opportunities around the AUD/USD pair.

Technical levels to watch