- AUD/USD finds some support near the 0.6375-70 area and rebounds around 40-45 pips intraday.
- The uptick lacked any obvious catalyst and shrugged off a goodish pickup in the USD demand.
- The attempted positive move runs the risk of fizzling out quickly amid absent the risk-off mood.
The AUD/USD pair managed to rebound around 40-45 pips from session lows and refreshed session tops, around the 0.6415 region in the last hour.
The pair extended last week’s rejection slide from 100-day SMA and lost some additional ground during the Asian session on Monday. The downtick marked the pair’s third consecutive day of a negative move and was fueled by a further deterioration in the global risk sentiment.
A US-China spat over the origin of the coronavirus overshadowed the optimism about the re-opening of economies in some parts of the world. This comes amid persistent worries over the economic fallout from the coronavirus pandemic and dented investors’ appetite for riskier assets.
The anti-risk flow was evident from a fresh leg down in the global equity markets which provided a goodish lift to the US dollar’s perceived safe-haven status. This, in turn, undermined demand for perceived riskier currencies, including the aussie.
This coupled with the US President Donald Trump’s threat to impose fresh tariffs on China in retaliation to its cover-up and mishandling of the coronavirus outbreak at the early stage further weighed on the china-proxy Australian dollar.
The greenback stood tall through the early European session, albeit the pair managed to stall its intraday slide and found some support near the 0.6375-70 region. The uptick lacked any obvious catalyst and runs the risk of fizzling out rather quickly.
Developments surrounding the coronavirus saga might continue to influence the broader market risk sentiment. This will eventually drive the USD demand and produce some meaningful trading opportunities in the absence of any relevant market moving economic releases.
Technical levels to watch
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