AUD/USD pares intraday gains to 2022 high, still well bid around 0.7400 mark

• AUD/USD surged past the 0.7400 mark and shot to a fresh YTD high on Monday.
• A blowout rally in commodities continued benefitting the resources-linked aussie.
• The prevalent risk-off mood capped gains for the pair amid sustained USD buying.

The AUD/USD pair retreated a few pips from the fresh YTD high touched earlier this Monday and was last seen hovering near the 0.7400 mark, still up over 0.60% for the day.

The pair prolonged its recent bullish trajectory and gained some follow-through traction on the first day of a new week amid the recent monster gains in commodity prices. The worsening situation in Ukraine, along with increasing Western sanctions on Russia have been fueling fears about supply crunches of key raw materials. This, in turn, was seen as a key factor that continued benefitting the resources-linked Australian dollar.

The AUD/USD pair shot to the highest level since November 2021, though a combination of factors held back bullish traders from placing fresh bets, at least for the time being. A further escalation in the Russia-Ukraine conflict weighed heavily on the global risk sentiment, which was evident from an extended sell-off in the equity markets. This, in turn, drove flows towards the safe-haven US dollar and capped the AUD/USD pair.

The greenback was further supported by Friday's mostly upbeat US monthly jobs report, showing that the economy added 678K jobs in February and the unemployment rate fell to 3.8% from 4.0% in January. Meanwhile, investors now seem convinced that the Fed would adopt a less aggressive policy stance to combat stubbornly high inflation. This might keep a lid on any further gains for the USD and act as a tailwind for the AUD/USD pair.

Even from a technical perspective, last week's sustained breakthrough the very important 200-day SMA and an over one-year-old descending trend-line add credence to the positive outlook. Hence, any meaningful pullback is more likely to attract fresh buying at lower levels and remain limited amid absent relevant economic releases.

Technical levels to watch