AUD/USD stabilizes while EUR/USD erases gains

The AUD/USD pair exceeded 0.7200 earlier in the day. However, it struggled to maintain its momentum since the USD began to gain strength during the US session.

At the beginning of the week, markets turned positive after the US Food and Drug Administration’s clearance to use antibody-rich plasma to cure coronavirus infected patients. Markets turned positive for risk. The dollar struggled to meet a safe-haven demand, and the DXY index dropped below 93.00.

Still, risk appetite helped the US Treasury yield gain resistance and provided assistance to the USD. DXY turned positive on the day above 93.20. The ten year US Treasury yield has increased by 2%.

Today, market action in the Asian session is likely to be rocky. Later in the week, the Conference Board Consumer Confidence Index will be published. Also, investors will carefully follow the Federal Open Market Committee President Jerome Powell’s speech at the Jackson Hole Symposium. The event will be held on August 27 and has considerable significance for the US and the world.

The EUR to dollar rate falls on the dollar recovery

The EUR/USD pair erased gains falling to 1.1792. It increased during the day but was far from the maximum. The recovery lacks strength. The pair looks slightly weak after failing to recover to the twenty-day moving average at 1.1810 on Monday. If the correction continues, the next strong support will be at around 1.1700/10.

After the beginning of the US session, the dollar gained momentum. US stocks then remain in positive territory. The Dow Jones Industrial Average is somewhat below the highs, up by 0.95%. The S&P 500 has increased by 0.70%. 

According to Citibank analysts, the EUR/USD pair needs to break through the resistance of 1.1900/20 to maintain gains towards higher levels. Still, the current consolidation sentiment points to a more upper floor about the area around 1.1600.