AUD/USD struggles to keep bounces off 50-day SMA, seesaw around seven-week-old support trend line. Risk aversion helped bears to cheer the biggest losses since early August. Fears of bigger virus wave 2.0, economic activity suppression and US stimulus deadlock were main contributors. Comments from RBA’s Debelle can entertain traders amid a light calendar day. AUD/USD fails to magnify the bounces off the lowest since September 09, marked the previous day, while taking rounds to 0.7225 at the start of Tuesday’s Asian session. With the risk-off mood at its full steam, global traders rushed to the US Dollar while dumping everything else including equities, commodities and linked currencies. Searching for the reasons, coronavirus (COVID-19) resurgence could be cited as the main catalyst whereas uncertainty over the US aid package and downbeat comments from Europe, the UK and the US policymakers also joined the line. All hail to King Dollar… Despite witnessing a mild recovery during the early hours of the week’s start, AUD/USD ended up marking the biggest losses in more than seven weeks by the end of Monday. The risk barometer initially took a hit after the surge in the COVID-19 numbers in Europe and Britain propelled chatters of another national lockdown. It’s worth mentioning that some of the countries in the bloc and the northern UK have already re-started local lockdown restrictions. Elsewhere, European Central Bank (ECB) President Christine Lagarde said that the Union’s economic recovery remains “very uncertain, uneven and incomplete.” The Fed Chair, on the other hand, recently testified that the path ahead for the economy remains “highly uncertain”. Additionally contributing to the sober mood is unending arguments, over the much-awaited COVID-19 stimulus, between the US Democrats and Republicans. The American Congress does not only fail to offer the details of the aid package but also lags conveying the stop-gap funding plans despite being near to the deadline of September-end. On a distant note, comments from the Global Times editor Hu Xijin, warning Australia to not follow the US advice to avoid the risk of war also weigh on the Australian dollar. Against this backdrop, Wall Street closed in red whereas the US 10-year Treasury yields dropped 2.5 basis points to 0.669% at Monday’s close. Looking forward, Guy Debelle, Deputy Governor of the Reserve Bank of Australia (RBA) is up for speaking at 00:30 GMT and will be closely followed for fresh impetus. The title of the speech at the Australian Industry Group conference is “The Australian Economy and Monetary Policy” and will be the key to predict short-term AUD/USD moves ahead of the second day of the Fed Chair’s testimony. Technical analysis Although 50-day SMA, currently around 0.7195, helped AUD/USD to close beyond an ascending trend line from August 03, at 0.7225 now, buyers are likely to remain unconvinced unless the quote crosses the 0.7340/46 area comprising August 31 low and multiple highs marked from September 03. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Pubs and restaurants in England to have 10pm closing times – BBC FX Street 2 years AUD/USD struggles to keep bounces off 50-day SMA, seesaw around seven-week-old support trend line. Risk aversion helped bears to cheer the biggest losses since early August. Fears of bigger virus wave 2.0, economic activity suppression and US stimulus deadlock were main contributors. Comments from RBA’s Debelle can entertain traders amid a light calendar day. AUD/USD fails to magnify the bounces off the lowest since September 09, marked the previous day, while taking rounds to 0.7225 at the start of Tuesday’s Asian session. 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