AUD/USD gives back some gains, hovers around 0.7350 amid US dollar strength

• The AUD/USD threatens to break above 0.7400 despite broad US dollar strength across the board.
• Higher Iron Ore prices boost the Australian dollar.
• AUD/USD: A daily close above the 100-DMA could exert upward pressure towards 0.7500. 

The AUD/USD advances 0.55% during the New York session and is trading at 0.7348 at the time of writing. Despite a negative market sentiment as witnessed by US stocks recording losses between 0.45% and 0.56%, the Australian dollar is rising on the back of Iron ore prices, which are up 5.45%, at  $116 per metric tonne.

Overall, US dollar strength could not outweigh the Australian dollar

Meanwhile, the US Dollar Index, which tracks the buck’s performance against a basket of six currencies, is advancing 0.30%, at 94.38, failing to boost the greenback against the Australian dollar.

Concerning COVID-19 Australian issues, the ease of lockdown measures after four months has been welcomed by investors, boosting the AUD against the US dollar.

The Australian economic docket will feature the HIA New Home Sales for September in its monthly reading on Tuesday. Further, the Westpac Consumer Confidence for October is expected at 2.4%, which is higher than the September reading.

On the US front, the JOLTS Job Openings for August are foreseen at 10.925M. Also, the Atlanta Federal Reserve President Raphael Bostic will cross the wires.

AUD/USD Price Forecast: Technical outlook

Daily chart

The AUD/USD is trading above the 50-day moving average (DMA), which lies at 0.7303 but below the longer time frames, suggesting the pair is under downward pressure. Nevertheless, a break above the 100-DMA at 0.7424 could pave the way for further gains. The first resistance would be 0.7477. A breach of that level would expose key essential supply zones, the psychological 0.7500, and the 200-DMA at 0.7575.

On the other hand, a break below the 50-DMA could trigger a move towards the October 6 low at 0.7225, immediately followed by 0.7200. 

The Relative Strength Index is at 56, slightly up, suggesting that a move higher is on the cards