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AUD/USD nears seven-week low around 0.6800 amid coronavirus contagion

  • AUD/USD keeps on bearing the burden of China’s fatal virus outbreak.
  • The risk-negative headlines from the Middle East and the US add worries to the traders.
  • Off in Australia, China fail to defy the market’s risk aversion, the US data will be in focus later in the day.

AUD/USD remains on the back foot around 0.6810, with an intra-day low of 0.6801 that nears the seven-week bottom, during Monday’s Asian session. Even if markets in Australia and China are closed, fears of China’s coronavirus outbreak weigh on the pair.

While earlier headlines suggested the death toll rose from 57 to more than 80, the latest updates from the Chinese authorities suggest more than 30,400 people at risk. This rings an alarm to the global community as positive cases are also found in the US, Japan and Sydney. The World Health Organization (WHO) may now rethink their previous decision to delay terming the incident as an international emergency.

Read: China covering up true number of Coronavirus mortalities

Not only the coronavirus outbreak but fresh fears of the US-Iran war, after repeated attacks on the US troops in Iraq, as well as the Trump administration’s push to steep and aluminum tariffs also add to the market’s risk-off.

With this, the US 10-year treasury yields drop to multi-week low while taking rounds to 1.63% whereas the S&P 500 Futures lose near 1% as flashing sub-3,260 by the press time.

Although the Chinese government has extended the Lunar New Year break to better confront the epidemic, news from the same could keep traders’ busy. On the other hand, the US New Home Sales and the Dallas Fed Manufacturing Index will decorate the economic calendar.

Technical Analysis

Unless successfully trading beyond an ascending trend line since early-October 2019 as well as the 100-day SMA, around 0.6830 and 0.6845 respectively, buyers are less likely to enter trading.

 

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