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  • AUD/USD remained depressed for the second consecutive session on Monday.
  • A softer risk tone benefitted the safe-haven USD and was seen exerting pressure.
  • Upbeat Chinese GDP print did little to lend any support to the China-proxy aussie.

The AUD/USD pair remained depressed through the early European session and was last seen hovering near one-week lows, around the 0.7685-80 region.

The pair added to the previous session’s losses and witnessed some follow-through selling for the second consecutive session on Monday. A softer tone around the equity markets was seen as a key factor that benefitted the safe-haven US dollar’s relative safe-haven status against its Australian counterpart.

Concerns about the economic fallout from the ever-increasing coronavirus cases and the imposition of fresh lockdown measures continued weighing on the global risk sentiment. Even Monday’s better-than-expected Chinese GDP print did little to boost investors’ confidence or lend any support to the China-proxy aussie.

According to the official data released earlier this Monday, the world’s second-largest economy recorded a growth of 6.5% during the October-December period. Adding to this, Chinese Industrial Production increased 7.3% YoY in December, though was largely offset by weaker-than-expected Retail Sales figures.

Meanwhile, the risk-off mood led to some follow-through pullback in the US Treasury bond yields and held the USD bulls from placing aggressive bets. This, in turn, might limit any deeper losses for the AUD/USD pair and warrants some caution before positioning for an extension of the recent pullback from multi-year tops.

There isn’t any major market-moving economic data due for release from the US, leaving the pair at the mercy of the USD price dynamics. Meanwhile, development surrounding the coronavirus saga will play a key role in influencing demand for the safe-haven USD and produce some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch