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  • AUD/USD failed to capitalize on its early uptick and refreshed daily lows in the last hour.
  • The risk-off mood was seen as a key factor that weighed on the perceived riskier aussie.

The AUD/USD pair quickly retreated around 35-40 pips during the early European session and weakened back below the 0.7300 mark, refreshing daily lows in the last hour.

The pair managed to regain positive traction on the first day of a new week, albeit lacked any strong follow-through buying and remained confined in a one-week-old trading range. A fresh wave of the global risk aversion trade 0capped the upside for the perceived riskier Australian dollar.

The ever-increasing number of coronavirus cases across the global dampened hopes of any V-shaped economic recovery. This coupled with renewed concerns over worsening diplomatic tensions between the world’s two largest economies weighed on investors’ sentiment and dented appetite for risker assets.

The anti-risk flow was evident from a fresh leg down in the equity markets. This, in turn, provided a modest lift to the US dollar’s perceived safe-haven status and further contributed to the AUD/USD pair’s pullback from an intraday high level of 0.7324, touched during the Asian session.

In the absence of any major market-moving economic releases, the broader market risk sentiment will play a key role in influencing the AUD/USD pair. Apart from this, a scheduled speech by the Fed Chair Jerome Powell might influence the USD price dynamics and produce short-term trading opportunities.

Technical levels to watch