AUD/USD Extends Slide Below 0.7050 at Two-Month Lows
The AUD/USD pair has continued to lose ground for the fifth day in a row on Thursday. The pair has fallen to lows of more than two months, around the 0.7030 regions.
The AUD/USD prolonged its recent bearish move. Now it retraced more than 300 pips from near the 0.7345 resistance zone amid sustained buying interest in the US dollar. The renewed concerns about the second wave of coronavirus infections continued to weigh on investor confidence. Worries about delayed economic recovery are growing. They have benefited the US dollar since it is perceived as a global reserve currency.
USD bulls have largely ignored warnings from various Fed officials on Wednesday. The central bank of the United States emphasized the need for greater fiscal stimulus to sustain the economic recovery. It took cues from the prevailing sentiment of risk aversion. The risk-off money flow has weighed on the perceived riskier Aussie further. As a result, it contributed to the AUD/USD pair’s current decline.
Investors are awaiting the United States economic news
Given the previous day’s break of the horizontal support at 0.7140 and a subsequent drop below the 0.7100 level, the decline could also be attributed to some technical selling. Therefore, some continuing weakness towards the 100-day SMA, around the critical psychological level of 0.7000, now seems like a possibility.
Market participants are now awaiting the US economic calendar, highlighting data release for weekly initial jobless claims and new home sales. This, along with a scheduled statement from Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin, will influence the USD price dynamics. Moreover, it will likely provide some trade boost.
Meanwhile, market risk sentiment and developments around the coronavirus saga will play a fundamental role in boosting the AUD/USD pair during Thursday’s European session.
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