AUD/USD consolidates daily gains despite a weak USD

After starting the day with a bullish gap, the AUD/USD quickly filled the gap in the first trading hour of the week but was able to find support at 0.7540. From that point on, the pair started a consistent rise and inched closer to its opening level at 0.7585. In the last couple of hours, the pair has been in a consolidation phase, correcting some of its daily gains. At the moment, the pair is still up 0.28%, at 0.7565.

The drop witnessed in the last couple of hours is seen as nothing more than a technical correction as there are no fundamental catalysts behind that move. In fact, the US Dollar Index continues to stay under pressure as it's having a tough time holding above the 99 handle. As of writing, the index was at 98.90, losing 0.75% on the day.

The French election result has been the primary driver of the price action on the first trading day of the week. While the USD has a difficult time finding demand, the stock markets cheered the outcome and helped the risk appetite increase. The economic docket doesn't future any data in the remainder of the day, and the market sentiment could assist the pair to make another bullish attempt.

Technical outlook

With a break above 0.7585 (daily high), the pair could aim for 0.7610 (Apr. 17 high) and 0.7640 (Apr. 2 high). To the downside, the supports align at 0.7500 (psychological level) ahead of 0.7470 (Apr. 12 low) and 0.7400 (psychological level).

• AUD/USD: lower end of the $0.7500-$0.7700 range has been frayed - BBH