AUD/USD retraces from multi-year low towards 0.6300 despite coronavirus fears
- AUD/USD pulls back from November 2008 low with limited firepower.
- Efforts by Trump, Fed and Aussie PM considered insufficient to tackle the pandemic.
- Coronavirus headlines will be the key amid a light economic calendar.
AUD/USD pair dropped to 0.6213, the lowest since November 2008 amid a macro risk-off on Thursday. Though, Friday’s start of the Asian session portrays consolidation to 0.6275, high of 0.6285, by the press time.
US President Donald Trump’s inability to perform on the hints of ‘major’ economic response to the coronavirus (COVID-19) triggered initial risk aversion on Thursday. The moves were then carried forward by the ECB’s less severe action plan to the disease that is now affecting the mainstream personalities in the US, the UK and Europe.
It’s worth mentioning that the Aussie PM Scott Morrison’s efforts to please traders with multi-billion stimulus also failed.
The day-end moves could flash a small distance from the multi-year low as the New York Federal Reserve infused liquidity through repo operation.
While portraying the risk-off, Wall Street sees the sea of red with DJIA marking the biggest daily loss since October 1987 and the S&P 500 confirms the bear market by losing more than 20% from its February 2019 top.
The New York State’s declaration of emergency amid the COVID-19 is among the latest news concerning the epidemic.
Investors will now pay close attention to the pandemic headlines amid a lack of major data/events on the economic calendar. However, the broad risk aversion wave is less likely to fade soon, which in turn can keep exerting downside pressure on the risk barometer Aussie.
Technical Analysis
The year 2008 low near 0.6000 psychological mark is now clearly in the minds of the bears.