AUD/USD trims losses, but bearish channel still intact
- AUD/USD has recovered from session lows, but remains trapped in a bearish channel.
- Aussie was offered in early Asia on renewed coronavirus scare.
The selling interest around the Aussie dollar has weakened somewhat in the last few minutes , allowing for recovery in AUD/USD from session lows, although the pair is still flashing red and is trapped in a bearish channel on the daily chart.
The currency pair is currently trading at 0.6725, having hit a session low of 0.6707.
The Aussie dollar came under pressure in early Asia with reports stating a big rise in the number of coronavirus cases to 14,840 from Wednesday’s 1,638 in China’s Hubei province.
The big rise, however, is reportedly due to a change in the diagnostic standard for coronavirus cases. The new method includes the “clinically diagnosed” – those who exhibit symptoms but haven't been tested positive.
The mild recovery in Aussie could be due to investors reassessing the trend in the number of new cases using the new method. If the trend is found to be slowing, the Aussie dollar could turn positive on the day with a move above 0.6739.
That said, a bullish reversal would be confirmed if and when the pair exits the bearish channel represented by trend lines connecting Jan. 2 and Jan. 16 highs and Jan. 8 and Jan. 31 lows.