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AUD/USD clings to strong gains near 2-week tops

The AUD/USD pair continued gaining positive traction for the second consecutive session on Tuesday and climbed to two-week tops, around mid-0.7100s in the last hour.

A combination of supporting factors helped the pair to build on the overnight goodish bounce from sub-0.7100 level and finally break through the 0.7130 supply zone. The ongoing upsurge in crude oil prices, supported by Libyan geopolitical tensions underpinned demand for commodity-linked currencies – including the Aussie.

This coupled with the prevalent US Dollar selling bias, despite the latest leg of an uptick in the US Treasury bond yields, and the latest optimism over US-China trade talks provided an additional boost/remained supportive of the strong bid tone surrounding the China-proxy Australian Dollar.

The positive move was further supported by today’s better than expected Aussie home loans data, though a slight deterioration in investors’ appetite for riskier assets, as depicted by a weaker tone around equity markets, kept a lid on any runaway rally, at least for the time being.

It would now be interesting to see if the pair is able to capitalize on the positive momentum or bulls opt to lighten their positions amid absent relevant market moving economic data on Tuesday and ahead of Wednesday’s important releases of the FOMC meeting minutes and the latest US consumer inflation figures.

In the meantime, scheduled speeches by influential Fed officials and RBA Assistant Governor Guy Debelle might produce some short-term trading opportunities during the late US trading session on Tuesday/early Asian session on Wednesday.

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