AUD/USD Forecast: Resurgent coronavirus contagions weigh on the Aussie

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.6955

The Australian government announced a six-week lockdown in Melbourne.
The Reserve Bank of Australia left the cash rate unchanged at 0.25% as expected.
AUD/USD is technically neutral and holding above the 0.6900 level.

The AUD/USD pair is finishing Tuesday with modest losses in the 0.6950 price zone, retreating from a daily high of 0.6997. The Aussie ignored the RBA monetary policy announcement, as the central bank left its cash rate unchanged at 0.25% as widely anticipated. As they did in their previous meeting, policymakers said that the downturn has been less severe than earlier expected, yet at the same time, remained cautious about longer-term developments amid uncertainty related to the coronavirus pandemic.

Instead, the Aussie fell on news that the government announced a six weeks lockdown in all Metropolitan Melbourne and other surrounding cities amid a new outbreak with 191 new COVID-19 CASES reported. Australia won’t release macroeconomic data this Wednesday.

AUD/USD short-term technical outlook

The AUD/USD pair is neutral in the short-term, although the downside potential remains limited amid broad dollar’s weakness. In the 4-hour chart, the pair is struggling to hold above its 20 SMA, but well above the larger ones, while technical indicators have pared their slides and stabilized around their midlines. A steeper decline could be expected on a break below the 0.6895 support, although buyers may likely reappear ahead of the 0.6800 threshold.

Support levels: 0.6930 0.6895 0.6850

Resistance levels: 0.6995 0.7020 0.7060

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD remains depressed below mid-1.1800s; downside potential seems limited

The EUR/USD pair attracts some sellers for the second consecutive day on Tuesday and hovers below mid-1.1800s amid a relatively quiet trading action during the Asian session. The broader fundamental backdrop, however, warrants some caution for bearish traders before positioning for deeper losses.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold declines as trading volumes remain subdued due to holidays in China

Gold price extends its losses for the second successive session, trading around $4,930 per troy ounce during the Asian hours on Tuesday. Gold price is trading nearly 0.7% lower at the time of writing as trading volumes stayed thin due to market holidays across China, Hong Kong, and other parts of Asia.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.