The AUD/USD pair recovered around 40 pips from the intra-day low and settled at around 0.7310 at the start of the European session.
The pair attracted deep buying near 0.7270 on Tuesday and is currently moving towards the supply zone 0.7340. The fall in the value of the US dollar has led to a sharp rise in the value of the Australian dollar.
As news of the vaccine’s invention had a positive impact on the market, it is slowly disappearing as lockdowns are being announced in various states to prevent coronavirus infection. As a result, the US dollar has moved to a defensive position and the AUD/USD has appreciated.
Increased corona virus infection has led to an increase in global risk sentiment and a decrease in trading sentiment in the equity market. As risk sentiment declines, the value of the Australian dollar will fall slightly.
As a result, the price of the pair is likely to move above the supply zone 0.7340, as it will still take a long time to bring the corona infection under control in the United States.
Investors will be keeping an eye on US building permits and housing reports today. The Housing Market and Building Permit Report may come in handy as the housing sector has seen tremendous growth in recent times. According to this report, the US dollar may rise slightly and the AUD/USD may fall.