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  • AUD/USD remains on the back foot near the lowest levels in 17 years.
  • Risk aversion on its full steam despite global governments’/central banks’ fight against coronavirus.
  • Cases rise worldwide, with increased pace in Italy and the UK, measures to tame the negative impact seem to be negative for the economy.

With the global markets in panic mode, mainly because of the coronavirus outbreak and harsh actions to tame the pandemic, AUD/USD remains on the back foot near 0.5775 amid the initial minutes of the Asian session on Thursday.

Helicopter money fails to please the traders…

Despite announcing multibillion dollars of stimulus, monetary measures to counter the negative implications of the coronavirus (COVID-19), global policymakers fail to restore investors’ confidence.

The reason could be lying in the skepticism about the performance and/or source of funding to counter the epidemic. It should also be noted that Fitch earlier came out with the analysis that containment actions post a risk to the global structured finance.

COVID-19 numbers rise…

There are more than 2,14,000 cases of the deadly virus across the globe with a major spike in the numbers from the UK and Italy over the last 24 hours. The US closes its borders with Canada and lockdown measures are on the hike in Europe as well as the rest of the world.

The resultant panic drags the Wall Street down but helps the US 10-year treasury yields to remain up beyond 1.00%.

Markets will now keep eyes on the Aussie employment data for February month ahead of the key RBA decision that is likely to announce further measures to counter the deadly virus. “For the Feb Employment report, we are looking for a 5k increase and with the participation rate expected to remain at 66.1%, the unemployment rate should tick higher to 5.4%. A number worse than 5.4% is likely to increase market chatter of the RBA initiating QE as early as April, but a lot will depend on how aggressive Fed policy is and coronavirus developments,” said TD Securities ahead of the release.

Technical Analysis

Bears are now targeting the year 2003 low near 0.5670 as immediate support with June 2002 tops surrounding 0.5800 likely offering a nearby resistance.