- AUD/USD witnessed some heavy selling for the fifth consecutive session on Thursday.
- Renewed coronavirus jitters, the risk-off mood benefitted the safe-haven greenback.
- Technical selling below the 0.7100 further contributed to the pair’s ongoing downfall.
The AUD/USD pair continued losing ground for the fifth consecutive session on Thursday and dived to over two-week lows, around the 0.7030 region.
The pair prolonged its recent bearish trajectory and has now retreated over 300 pips from the vicinity of the 0.7345 supply zone amid sustained US dollar buying interest. Renewed concern about the second wave of coronavirus infections continued weighing on investors sentiment and boosted the greenback’s status as the global reserve currency.
The USD bulls largely shrugged off warnings by various Fed officials on Wednesday, stressing the need for more fiscal stimulus to sustain the economic recovery, instead took cues from the prevalent risk-off environment. The anti-risk flow further weighed on the perceived riskier Australian dollar and contributed to the AUD/USD pair’s ongoing slide.
Given the overnight breakthrough the 0.7140 horizontal support and a subsequent fall below the 0.7100 round-figure mark, the downfall could further be attributed to some technical selling. Hence, some follow-through weakness towards 100-day SMA, around the key 0.7000 psychological mark, now looks a distinct possibility.
Market participants now look forward to the US economic docket, highlighting the release of Initial Weekly Jobless Claims and New Home Sales data. This, along with a scheduled testimony by the Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin, will influence the USD price dynamics and provide some trading impetus.
In the meantime, the broader market risk sentiment and developments surrounding the coronavirus saga will play a key role in driving the AUD/USD pair through the European trading session on Thursday.
Technical levels to watch
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