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  • AUD/USD ignores upbeat comments from RBA’s Lowe, extends pullback from 10-week top.
  • Risk-tone sours amid fresh US-China tussle, virus worries.
  • US preliminary PMIs, Jobless Claims can decorate the calendar.

AUD/USD stays offered, refreshes intraday low to 0.6551, down 0.70% on a day, after RBA Governor’s comments on early Thursday. Even if the Aussie central bank governor Philip Lowe tried to paint a rosy picture of the Australian economy, markets keep focusing on the US dollar pullback and fresh risk-off sentiment to drag the quote. 

Read: RBA’s Lowe: Australian financial system is resilient and is well placed to deal with COVID-19

Fears of coronavirus resurgence have taken a toll on the risk-tone as China’s second wave and latest global virus data suggest the worst isn’t over. The updates also pour cold water on the face of optimism surrounding the economic restart.

Also weighing on the trading sentiment are the latest tweets from US President Donald Trump, not to forget the early-Asian news from Washington Post, that signals intensified tension between the US and China.

Furthermore, the Aussie-China tussle is still not solved even if the Global Times signaled positive indicators in its latest piece.

Amid all these, the US dollar index (DXY), a gauge of the greenback versus the major currencies, recovers from 14-day low and adds extra burden on the pair.

That said, US 10-year Treasury yields drop 1.7% to 0.662% whereas stocks in Asia-Pacific and S&P 500 Futures also register mild losses below 1.0% by the time of writing.

Even if the trade/virus updates are back in focus, preliminary readings of the US May month PMIs and the weekly Jobless Claims will also be important to watch during the rest of the day. It should also be noted that the RBA’s Assistant Governor Guy Debelle is also up for speaking during the day and will be followed for fresh impulse.

Technical analysis

Failures to refresh multi-day high above 0.6665 direct the Aussie pair towards 100-day SMA retest, near 0.6500 now. Also acting as an upside barrier is the March month top surrounding 0.6685/90 and 0.6700 round-figure.