- AUD/USD stays below 0.6900 for third day in a row.
- Rising cases in the US, India-China tussle keep the safe-havens in demand.
- The surge in Gold helps the aussie pair to limit the downside.
- A lack of major data/events keeps trade/virus updates on the driver’s seat.
AUD/USD drops to 0.6850 at the start of Monday’s Asian session. In doing so, the quote extends late-Friday weakness from 0.6876 while also carrying the previous two-day moves below 0.6900. Though, the pair stays above last week’s close near 0.6840.
The broad risk-aversion wave, mainly backed by the coronavirus (COVID-19) woes and the global trade, geopolitical tussles, keeps exerting downside pressure on the market’s risk barometer. However, the recent rise in the Gold prices, due to its risk-safety allure, seems to offer mild support to the AUD/USD prices off-late.
Virus wave 2.0 in the US sparks global fears…
With Texas COVID-19 cases rising by over 5,000 for the seventh consecutive day in the weekend, the virus woes are getting firmer in the world’s largest economy. Earlier, Texas Governor halting reopening plans and Vice President Mike Pence delayed visit to Florida and Arizona portrayed the seriousness of the issue. Not only from the US, but figures are also on the rise from Asia and Europe as well.
Read: Record daily US COVID-19 cases are a serious problem for the US dollar
Other than the virus woes, geopolitical tension between China and India joins the broad trade wars among the key global economies to keep the market sentiment grim. Furthermore, fears of hard Brexit and expectations that further increase in virus cases will wipe out the latest monetary and fiscal efforts by global policymakers also offer a distant threat to the risk-tone sentiment.
Against this backdrop, Wall Street marked downbeat prints by the last week’s end whereas US 10-year Treasury yields revisited mid-May lows while falling 4.4 basis points to 0.64%.
Looking forward, traders will keep eyes on the qualitative factors, concerning the pandemic, trade and geopolitics, for near-term direction. The economic calendar in Asia is mostly quiet ahead of Tuesday’s China official PMI.
Technical analysis
21-day EMA surrounding 0.6840 offers immediate support to the pair whereas an upside break of 0.6900 resistance mark could trigger fresh recoveries toward the monthly resistance line, at 0.6930 now.
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