- AUD / USD clears losses, still looking with some downward pressure.
- Fall in the stock markets and recovery of the dollar, among the factors driving the drops.
AUD / USD remained on the defensive during the first half of the European session, although it has managed to rebound from the one-week lows. The pair is trading in neutral ground for the day around 0.7720, with lateral movements for hours, as well as other major currency pairs.
The pair extended the previous day’s sharp retracement drop of more than 100 pips from the 0.7815 region, or month-long highs. Al reached the lowest level at 0.7698, the low since April 14 before bouncing.
Renewed fears about another dangerous wave of coronavirus infections in some countries continued to weigh on investor sentiment. This, in turn, boosted some safe-haven flows to the US dollar and put pressure on the Australian dollar.
The dollar received an additional boost from a modest rally in US Treasury yields, but strength remains limited amid lower expectations of an early interest rate hike from the Federal Reserve. This helped limit the declines in the AUD / USD.
No data ahead of the US, the key traders will be looking at may be what the AUD / USD will do with the 0.7700 support zone. A confirmation below could point to further losses. What happens on Wall Street may be a deal breaker for the Aussie.
Technical levels
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