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AUD/USD charts minor bounce, but on track for weekly loss

  • AUD/USD recovered roughly by 10 pips from decade lows seen on Thursday. 
  • The currency pair is still on track to report one of its biggest weekly loss since September. 
  • Dovish RBA expectations are likely to keep the AUD on the defensive.

AUD/USD has bounced up slightly from decade lows but remains on track to end the week on a negative note. 

The currency pair is trading at 0.6619 at press time, having hit a low of 0.6624 an hour ago. The pair fell to 0.6610 on Thursday to print the lowest level since 2009. 

The minor bounce is nothing to write home about, as the pair is still down nearly 1.4% on a weekly basis. If the pair holds near current levels through Friday's GMT close, the resulting weekly loss would be the second-biggest since September. 

That looks likely, as the futures on the S&P 500 are reporting a 0.17% drop at press time. The risk-off tone will likely keep the AUD bulls at the bay and keep the haven assets like the US Treasuries better bid. 

Further, the odds of the Reserve Bank of Australia (RBA) cutting rates by 25 basis points to 0.5% in April have improved, courtesy of the dismal jobs data released Thursday. While the economy created 13,500 more net jobs in January, the unemployment rate jumped from 5.1% to 5.3%, forcing reinforcing expectations for a rate cut in April. 

As a result, corrective bounces in the AUD are likely to be met with offers, unless numbers out of China indicate the coronavirus is peaking, in which case, China-sensitive currencies like the Aussie dollar are likely to find strong hands. 

Technical levels

 

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