- AUD/USD opens with a bearish gap amid heightened coronavirus fears.
- The global flight to safety benefitted the USD and added to the selling bias.
- The technical set-up now seems to support prospects for further downfall.
The AUD/USD pair failed to capitalize on the attempted intraday bounce and remained well within the striking distance of over a decade low set earlier this Monday.
Having witnessed some intraday recovery on Friday, the pair opened with a bearish gap on the first day of a new trading week and was being weighed down by a combination of negative factors.
Growing market concerns over the economic impact of the coronavirus outbreak triggered a fresh wave of the global risk-aversion trade and weighed heavily on perceived riskier currencies, including the aussie.
Meanwhile, the global flight to safety benefitted the US dollar’s safe-haven status against its Australian counterpart and further collaborated to the pair’s heavily offered tone through the Asian session.
With Monday’s downfall, the pair already seems to have found acceptance below the 0.6600 round-figure mark and hence, some follow-through slide, led by technical selling, now looks a distinct possibility.
In absence of any major market moving economic releases from the US, the broader market risk sentiment might continue to act as a key determinant and produce some short-term trading opportunities.
Technical levels to watch
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