AUD/USD consolidates gains around 0.7500 ahead of US data, Australian inflation

• AUD/USD flirting with 0.7500, as the bulls cheer risk-on mood.
• The US dollar holds firmer, capping the aussie’s upside attempts.
• All eyes on the US CB Consumer Confidence and Australian CPI data.

AUD/USD is picking up fresh bids in the European session, recapturing the 0.7500 level, although the bulls appear to lack follow-through amid a broadly firmer US dollar.

The pair is well off the three-day highs reached at 0.7518 in the Asian trades, as the greenback continues to hold onto its recent advance amid the renewed optimism on the US infrastructure spending bill.

However, the prevailing risk-on market mood keeps the buoyant tone intact around the aussie dollar. Surging iron-ore prices in China also remain one of the main catalysts behind the aussie’s upbeat momentum.

The Dalian iron ore prices extend their rebound from multi-week lows amid a set of weekly industry data that showed a drop in iron ore shipments to China from Australia and Brazil due to escalating energy crisis worldwide.

Further, the extended correction in the US Treasury yields from five-month tops also benefits the AUD due to its increased attractiveness as an alternative higher-yield asset.

Investors also cheer the resumption of the US-China talks, with the US Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He having discussed macroeconomic and financial developments during their virtual call, earlier on.

Next of relevance for the pair remains the US CB Consumer Confidence data due later in the NA session. The aussie traders will also closely follow the sentiment on Wall Street for fresh trading opportunities ahead of the Australian Q3 CPI report. The Reserve Bank of Australia’s (RBA) Trimmed Mean CPI is seen arriving at 0.5% QoQ in Q3 vs. 0.5% previous.

AUD/USD technical levels

With the persisting bullish momentum, the aussie needs to take out the daily highs at 0.7518 to test the three-month tops of 0.7548. On the flip side, the immediate support is seen at the previous week’s low of 0.7452. The next target for the sellers is placed at 0.7400, the round number.

AUD/USD additional levels to consider