AUD/USD stays below 0.6400 on a new week as risk aversion prevails
|- AUD/USD snaps the three-day winning streak.
- The coronavirus-led fears remain as the upside barrier despite the greenback weakness.
- No major data/events up for publishing on the economic calendar, virus updates will be the key to watch.
AUD/USD drops to 0.6382, currently around 0.6388, to begin the trading week with Monday’s Asian session. Despite cheering the US dollar weakness on Friday, the pair’s upside has been capped by the coronavirus (COVID-19) fears.
Pandemic fears stop buyers…
Downbeat US data, as well as failures of Gilead’s Remdesivir in the initial trials, seem to have contributed towards the USD’s latest weakness. In doing so, the greenback pays a little heed to the $484 billion aid package as well as US President Donald Trump’s push to re-start the economy.
While major global economies are jostling with the demands to ease the lockdown, fears of resurgence seem to restrict policymakers, except for US President Trump, to rethink the push.
Alike US President Trump, Aussie PM Scott Morrison is also pushing for the fast economic restarts. The Financial Review states that Scott Morison wants faster reopening as he has shelved talk of a six-month economic "hibernation". The news piece also signaled that the Australian Prime Minister also said that the leader is nudging the states to allow more businesses to reopen before an official review is leaving open the option of an early wind-back of the $130 billion JobKeeper wage subsidies.
As per the latest data from John Hopkins University, there have been that 2.9 million cases and over 200,000 deaths due to the pandemic whereas the US figures suggest 939,000 infections with a near 54,000 deaths toll.
The NBC News quoted Dr. Deborah Birx, the White House Coronavirus Task Force coordinator while saying that while the coronavirus trends give her “great hope” for slow reopenings over the next few months, many of the social distancing measures that have upended American life will be a constant fixture through the summer. The US diplomat also said, as per the CNBC relying on the NBC update, “the US needs a ‘breakthrough’ on coronavirus testing to help screen Americans and get a more accurate picture of the virus’ spread.”
Not only the US but the UK, Europe and Asia are also struggling to find their way out of the pandemic that has hit the global economies hard. The same weigh on the market’s risk-tone sentiment and guards the Aussie pair’s near-term upside.
Moving on, the economic calendar in Asia remains quiet with holidays in New Zealand. As a result, the virus updates will be the key catalyst to watch.
Technical analysis
While multiple stops around 0.6250/45 seem to restrict the Aussie pair’s near-term downside, ahead of March-end top surrounding 0.6215/10, buyers are waiting for entry beyond the monthly top near 0.6435 to target early-March high around 0.6540.
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