AUD/USD remains under pressure below 0.6100 as markets stay defensive

AUD/USD drops to 0.6065 while extending the previous two-day losing streak at the start of Thursday’s Asian session. In doing so, the Aussie pays a little heed to the recent PMI numbers from home and China while relying more on the better than forecast numbers from the US as the coronavirus (COVID-19) crisis continues.

Coronavirus keeps traders on their toes…

Be it the early Wednesday's comments from US President Donald Trump or the latest pessimistic signs by the World Health Organization (WHO) official, a slew of grim words due to the virus continued to dent the trade sentiment. Also increasing the strength of the downbeat lines was extended lockdowns in Germany and Italy as well as surging numbers across the globe.

While portraying the risk-off, the US 10-year treasury yields drop nine basis points (bps) to 0.602% whereas Wall Street benchmarks dropped more than 4.0% each by their daily trading close on Wednesday.

Recently, the US Federal Reserve (Fed) took another step to combat the deadly disease via temporary easing for big banks. The Fed eased requirements to calculate supplementary leverage ratio that would exclude the US Treasury securities and deposits at Federal Reserve Banks from the calculation and will be in effect until March 31, 2021.

On the data front, US AiG Performance of Manufacturing Index and China’s Caixin Manufacturing PMI both marked upbeat figures whereas US activity numbers came in softer. However, better than forecast -150K ADP Employment Change to -27K, mainly due to the period of the survey that closed before the actual virus crisis, helped the US dollar to extend its broad strength.

Given the lack of major data/events on the Asian calendar, not to forget the market’s focus on the pandemic, qualitative catalysts are likely to be in the spotlight.

Technical analysis

Sustained trading below 21-day SMA, currently at 0.6175, keeps the pair pushed towards a 10-day SMA level of 0.5985.