- AUD/USD sold off for a 5th straight session on Thursday.
- Resurging covid fears and risk aversion boosted the safe haven US Dollar
- Technical selling sub 0.7100 added to the decline
The AUD/USD extended its selloff for a fifth consecutive session to 0.7030
Strong and persistent US Dollar demand has seen the pair trend southwards over 300 points to resistance at 0.7345. Second wave of coronavirus fears hit investor’s sentiment and lifted the safe haven global reserve currency USD.
Buyers of the USD shrugged off comments from various Fed officials on Wednesday, warning over the need for additional fiscal stimulus to support the slowing economic recovery.
Instead, the greenback looked to the risk-off environment for cues. The safe haven trade added pressure to the riskier Australian dollar and extended to the AUD/USD pair’s ongoing slide.
A breakthrough support at 0.7140 and decline sub 0.7100 means that the selloff could also be some technical selling Extended weakness towards 100-day SMA, around the key 0.7000 psychological mark, now looks very likely
Attention will now turn to the US economic calendar with Initial Weekly Jobless Claims and New Home Sales data in focus. Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin are also due to testify which could drive some movement.
Risk sentiment and covid developments will drive AUD/USD across the European trading session on Thursday.
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