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  • AUD/USD remained depressed amid a fresh wave of the global risk-aversion trade.
  • A modest USD pullback from multi-year tops helped ease the bearish pressure.
  • The upside seems limited and recoveries might still be seen as a selling opportunity.

The AUD/USD pair trimmed a part of its early losses to 11-year lows, albeit seemed struggling to extend the momentum further beyond the 0.6600 round-figure mark.

The pair added to its recent losses and witnessed some follow-through selling on the last trading day of the week. Pessimism about the global economy deepened further after the World Health Organization (WHO) officials warned that the novel coronavirus could spread far and wide throughout the world.

Attempted recovery lacks conviction

Concerns over deepening economic fallout from the deadly virus triggered a fresh wave of the global risk-aversion trade. This eventually dented the already weaker sentiment surrounding the China-proxy Australian dollar and dragged the pair below the 0.6600 mark for the first time since April 2009.

The pair tumbled to an intraday low level of 0.6586 but managed to find some support amid a modest US dollar pullback from multi-year tops. The risk-off mood-led downfall in the US Treasury bond yields prompted some USD profit-taking, which turned out to be the only factor that helped ease the bearish pressure.

Meanwhile, the attempted recovery lacked any strong bullish conviction and might still be categorized as some intraday short-covering amid extremely oversold conditions. Hence, any subsequent positive move runs the risk of fizzling out rather quickly and might still be seen as a selling opportunity.

Moving ahead, market participants now look forward to the US economic docket, featuring the release of flash Manufacturing and Services PMI, which might influence the USD price dynamics and produce some short-term trading impetus.

Technical levels to watch