AUD/USD: Bulls defend 0.7700 amid US dollar pullback, ahead of ISM

• AUD/USD recaptures 0.7700 starting out 2021.
• Coronavirus woes, weak Chinese data prompt DXY’s pullback.
• Eyes on US ISM Manufacturing PMI, virus and Georgia Senate election updates.

Having ended 2020 on a solid note, AUD/USD kicks-off 2021 on the front foot, as the bulls manage to recapture the 0.7700 level.

However, the further upside appears elusive, as the US dollar attempts a tepid bounce from the 2-1/2-year troughs amid growing coronavirus concerns and weak Chinese PMI data.

The bulls remain weighed down by the below-forecast Chinese Caixin Manufacturing PMI, which arrived at 53.0 in December vs. 54.9 expectations.

Meanwhile, the advance in copper and gold prices somewhat offsets the corrective pullback in the US dollar index, keeping the bid tone intact around the aussie dollar.

From a broader perspective, the coronavirus-vaccine optimism driven expectations of a faster economic recovery continue to bode well for the riskier assets such as the aussie. Further, an easy monetary policy stance by global central banks in 2021 could also keep the buyers hopeful.

The pair awaits the US ISM Manufacturing PMI data for fresh trading impulse. Meanwhile, the virus developments globally and the Georgia Senate election will be closely eyed for fresh dollar moves in the first trading week of 2021.

AUD/USD technical levels

“Overbought RSI conditions and expected consolidation from multi-month high suggests a pullback in AUD/USD prices towards the mid-December 2020 top near 0.7640. However, a two-week-old ascending trend line near 0.7635 could restrict short-term downside. Alternatively, a sustained run-up beyond the year 2020 peak surrounding 0.7745 becomes necessary to recall the bulls targeting April 2018 high near 0.7815,” explains FXStreet’s Analyst Anil Panchal.

AUD/USD additional levels