- AUD / USD retreats from weekly highs but defends the 0.7300 level.
- The DXY index attempts a rebound as sentiment turns sour at the start of the European session.
- Coronavirus concerns overshadow hopes for vaccines.
- The focus is on US retail sales data.
The backward movement of AUD/USD from the weekly highs of 0.7330 it has accelerated at the beginning of the European session, with the pair falling back to the 0.7300 level amid a return of risk aversion.
Risk aversion has reappeared in the markets due to the increase in coronavirus cases and localized blockages in the northern hemisphere, that seems to have overshadowed optimism for the vaccine.
The change in feeling has helped the safe-haven US dollar will regain some ground against major currencies, limiting the rise of the higher-yielding Australian dollar. The US dollar index rises from the daily lows of 92.46 to now trade at 92.60.
The pullback in the Australian dollar it may also be related to the pullback in S&P 500 futures. S&P 500 futures are down 0.25% on the day at 3.6415, retreating from all-time highs reached the previous day.
The pair rose above the 0.7300 level for the first time in four days on Monday after risk appetite accelerated after it Moderna announced that its vaccine was 95% effective in preventing infections in its final stage of clinical trials.
During today’s session, the focus will be on US retail sales data, Covid statistics and sentiment in global markets, which could generate some directional momentum to the pair.
AUD / USD technical levels
“The monthly high of 0.7340, marked on November 9, could become the first hurdle for short-term buyers before targeting a resistance line of more than three weeks, near 0.7370 now. On the other hand, a break to the downside of the confluence support at 0.7270 / 75, comprising a moving average and a fifteen-day uptrend line, could cause a drop towards the short-term horizontal zone around 0.7240 / 45 ” explains Anil Panchal, an analyst at FXStreet.
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