AUD/USD clings to modest daily gains above 0.7700
- AUD/USD lost its bullish momentum after advancing above 0.7700.
- NAB Business Confidence in Australia improved in January.
- US Dollar Index is edging lower for the third straight day.
The AUD/USD pair gained traction during the Asian trading hours on Tuesday and broke above 0.7700. After touching its highest level in two weeks at 0.7736, however, the pair lost its bullish momentum and was last seen posting modest daily gains at 0.7715.
USD struggles to find demand on Tuesday
Earlier in the day, the data published by the National Australia Bank showed that the Business Confidence in January improved to 10 from 5 in December and beat the market expectation of 8. On a negative note, the Business Conditions declined to 7 from 14 in the same period.
Despite the mixed data from Australia, the broad-based selling pressure surrounding the greenback allowed AUD/USD to push higher. Pressured by a sharp decline in the US Treasury bond yields, the US Dollar Index (DXY) is falling for the third straight day on Tuesday, losing 0.35% at 90.60.
The data from the US showed that the NFIB Business Optimism Index in January fell slightly to 95 from 95.9 in December. Later in the session, the December JOLTS Job Openings report will be featured in the US economic docket.
On Wednesday, the Westpac Consumer Confidence Index and the HIA New Home Sales data from Australia will be looked upon for fresh impetus. Until then, the USD's market valuation is likely to continue to drive AUD/USD's action.
Technical levels to watch for