AUD/USD is off the lows, not out of the woods yet amid risk-off mood
- AUD/USD nurses losses after risk-off flows extend into Asia.
- US dollar draws haven-demand on COVID-19, US political woes.
- Focus remains on virus stats, US PPI for next direction.
Following a brief consolidative stint seen in the overnight trade, AUD/USD resumed its decline and fell as low as 0.6936 in the last hour before recovering to 0.6950 level. Despite the rebound, the spot loses 0.21% on the day.
The aussie licks wound after sellers took over and throttled the risk assets such as stocks, yields, oil and Antipodeans amid a fresh risk-aversion wave. The persistent rise in the coronavirus cases in the US states pour cold water on the expectations of a V-shaped economic recovery.
Further, the US pollical uncertainty is raising its ugly head before the Nov presidential election, in light of the Supreme Court throwing out rulings allowing the House to access President Donald Trump’s financial records.
This was the main catalyst that knocked-off the risk sentiment in the US last session, with the US equities tumbling while boosting the safe-haven US currency.
Markets also remain wary over the looming US-China trade risks and souring Australian-China diplomatic relations over the Hong Kong issue, which could likely keep aussie’s recovery attempt in check.
Next of relevance remains the US Producer Price Index (PPI) and fresh coronavirus updates for fresh cues on the global market sentiment, eventually impacting the major.
AUD/USD technical levels
The immediate support is seen at 0.6936 (daily low/ 10-DMA), below which the 20-DMA at 0.6910 will be tested. On the flip side, the recovery will likely face stiff hurdle at 0.6962/70 (5-DMA/ daily pivot point). The next resistance is aligned at 0.7000 (round figure).
AUD/USD additional levels