- AUD/USD recalls the sellers after Wednesday’s pullback.
- Fears of ‘two viruses’, US President Trump’s threat to Iran trigger recent risk-off.
- Optimism surrounding US economic restart, virus data remains.
- Aussie trade data become the immediate catalyst.
AUD/USD fails to hold onto the previous day’s recovery gains while declining below 0.6300, with a low of 0.6292, currently down 0.36% on a day to 0.6300, as the Tokyo opens for Thursday’s trading.
The latest burden on the pair seems to exist after the US Coronavirus Task Force Briefing. Even if US President Donald Trump kept selling his idea of economy’s re-open at the conference, US centers for disease control and prevention Director Robert Redfield cited fears of having flu and the coronavirus outbreak at the same time.
Also adding strength into the risk-aversion wave could be President Trump’s threat to Iran if they come too close to the US waters.
That said, the US 10-year Treasury yields snap the two-day recovery while taking rounds to 0.615% with the S&P 500 Futures flashing mild losses of 0.50% to 2,772 by the press time.
It’s worth mentioning that a pause in the oil debacle and flattening of the coronavirus (COVID-19) curve in the US, Europe and the UK helped the markets the previous day.
Moving on, the preliminary readings of Australia’s March month Trade Balance, Imports and Exports could offer immediate direction to the pair ahead of the busy economic docket. Though, the virus updates and commodity moves are less likely to lose their importance during the meantime.
Concerning the Aussie data, Westpac said, “At 11:30 am Syd/9:30 am Sing/HK the ABS will release the preliminary estimate for the March trade balance (a new release as part of its response to COVID-19). Note that this only covers goods, not services (i.e. no update on tourism and education) and is not seasonally adjusted. Exports and imports will both be dented further by physical distancing restrictions and trade disruptions; however, exports will be cushioned by a rebound in iron ore shipments, post Cyclone Damien.”
Technical analysis
A downside break below 0.6265 becomes necessary to recall the March-end top surrounding 0.6215. Meanwhile, a 50-day EMA level of 0.6340 and the monthly top close to 0.6445 could keep the pair’s near-term upside guarded.
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