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  • AUD/USD is pressured following the Fed’s staement as focus turns to the covid virus.  
  • Risk-off is weighing on the commodity complex. 

AUD/USD is tracking the stock market lower as investors grow concerned over the spread of the virus.

At the time of writing, AUD/USD is trading at 0.7673 and down some 0.9%.

The statement states that the QE will continue at $80B in treasuries and $40B in MBS per month and that the pace of economic activity and employment has moderated in recent months.

Fed chair Jerome Powell’s presser will now be what markets will tune in for at the top of the hour.

Watch line Fed’s Powell’s presser

His projections for economic resilience pertaining to the spread of covid will be critical.

With respect to the threats of the virus, monetary policy is closely tied to the fiscal response, so Powell will likely be questioned on this which could pose risks for the commodity complex, depending on how down beat he is about it. 

Analysts at  Barclays argued that the resiliency of US economic activity could be tested in the coming months:

“Although the current consensus is that it is no more virulent than the existing strain, and seemingly prevented as effectively using existing vaccines, available epidemiological studies do suggest it is more transmissible.”

AUD/USD technical analysis

AUD/USD is trading the stock market lower:

The bulls have failed to convince on the upside and the baton has now been passed to the bulls to see whether then can do a more conclusive job of the M-formation:

While the price is expected to test the M-formation’s neckline, the dynamic support of the symmetrical triangle has already been broken.

This could now act as a counter trendline and fend off pressures towards the neckline. 

Instead of a 50% mean reversion, its could be that the deepest the correction makes it to is the 61.8% Fib of the hourly bearish inpulse that has a confluence with the dynamic support: