AUD/USD struggles to fill the gap below 0.6625 as coronavirus-led risk-off continues

AUD/USD trades mildly weak to 0.6610 during the early Monday. Even so, the pair remains near 11-year low as global market players continue to adhere to risk aversion amid fears of coronavirus.

No cases off-late but fears refrain to recede…

The Global Times and the World Health Organization (WHO) shared the news that no fresh coronavirus cases have been registered on Sunday. This might have helped the pair to bounce off the multi-year low during the recent trades.

However, risk-tone remains heavy as a widespread outbreak in coronavirus cases from Italy during the weekend, from three to 132 in a matter of days, threaten the trade sentiment. Also contributing to the risk-off could be the presumptive case from Ontario and rising numbers from Japan (838 by the end of February 23).

In order to counter the contagion, China’s trade council issued 3,325 force majeure certificates to the firms affected due to the epidemic. The same is likely to negatively affect China’s commitment to the US as a part of the phase-one deal even if both the sides recently turned down any such prospects.

While portraying the market’s risk-off, Australia’s ASX 200 index declines more than 2.0% to 6,990 whereas S&P 500 Futures also lose 1.22% to 3,298 by the press time.

Even if Chinese efforts to tame the epidemic might offer intermediate pullbacks to the Aussie pair, broad risk aversion can keep exerting downside pressure. As a result, traders will keep eyes on the macro headlines concerning the Chinese disease that has recently challenged the global economy.

Technical Analysis

The February 10 low near 0.6660 acts as the immediate upside barrier while early-March 2009 high surrounding 0.6560 can offer nearby support during the pair’s declines below 0.6585.