FxWirePro: AUD/USD holds marginal gains, US dollar strength limits upside

AUD/USD chart - Trading View 

AUD/USD was trading 0.20% higher on the day at 0.7252 at around 07:30 GMT, after closing 0.63% lower in the previous session.

The pair is holding marginal gains, but further upside looks elusive on broad-based U.S. dollar strength.

U.S. Treasury yields slightly eased, but held close to a 7-week trough on growing expectations of a earlier-than-expected U.S. rate hike, pushing the dollar to a multi-month high.

DXY was trading at 93.77 at the time of writing, slightly lower than session highs at 93.88 hit earlier in the day. The index has eased slightly from multi-month highs, but upside bias intact.

St. Louis Federal Reserve President James Bullard on Tuesday cautioned high inflation may require more aggressive steps by the central bank, including two interest rate hikes in 2022.

On the other side, Fed Chair Jerome Powell in his testimony before the U.S. Senate Banking Committee on Tuesday said the U.S. economy is still far from achieving maximum employment, a key criteria for rate hikes.

Conflicting central bankers views may limit dollar gains. But bullish bias remains intact which could limit upside in AUD/USD.

Technical analysis shows the major finds stiff resistance at daily cloud and breach below 200-week MA support (currently at 0.7212) is likely to drag the pair lower.