AUD/USD pushes higher toward 0.7200 supported by risk flows

• AUD/USD is rising modestly after closing the day in the red on Friday.
• Risk-on market environment hurts the greenback on Monday.
• Chicago Fed's National Activity Index will be the only data release from the US.

The AUD/USD pair closed in the negative territory on Friday but started the new week on a strong footing supported by risk flows. As of writing, the pair was 0.45% on a daily basis at 0.7193.

Risk flows reclaim control of markets

US President Donald Trump announced on Sunday that they will allow the emergency usage of COVID-19 plasma treatment. Additionally, Chinese Premier Li Keqiang noted over the weekend that the Chinese economy could grow in 2020, helping the China-proxy AUD stay resilient against its rivals.

Meanwhile, the risk-on market environment is making it difficult for the greenback to find demand. The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, snapped an eight-week losing streak last week. However, the DXY is pushing lower on Monday and was last seen losing 0.32% at 92.90.

The Federal Reserve Bank of Chicago will release its National Activity Index later in the day. There won't be any macroeconomic data releases featured in the Australian economic docket and the risk perception is likely to remain as the primary driver of AUD/USD's movements. Second-quarter GDP data from the US and the Jackson Hole Symposium later in the week will likely have a significant impact on the pair's action.

Technical levels to watch for