On Tuesday morning, the AUDUSD pair gained more than 30 pips and rallied above the 0.6700 mark to 0.6724. The major comfortably sits above this level, however is unable to witness a sustainable recovery yet, and the November low in the 0.6755 region seems to be limiting the upside momentum.
Today, the Reserve Bank of Australia (RBA) left its official cash rate unchanged at 0.75%. Although it reiterated that rates would remain on low levels for an extended period of time and said that it was too early to assess the impact of coronavirus on the economy, naming it among the main reasons for global economic uncertainty, the central bank didn’t cut rates to 0.5% as some of the economists predicted. That was positive news for AUD and the major edged higher.
Traders continue to focus on coronavirus outbreak that defines the market mood: the number of infected people in China climbed to around 20,500; 64 new deaths were reported making the total death toll reach a daily record of 425. Hong Kong confirmed its first death as well.
However, Chinese foreign ministry asked other countries especially the US not to overreact to the disease and step up its efforts and cooperation with China to cope with the virus while Chinese President Xi Jinping had a meeting with top officials on the coronavirus issue and called for the improvement in public health system and environmental sanitation. Those latest comments from Chinese authorities calmed markets down and cheered them up a bit though risk sentiment remained tepid, which checked further gains in the AUDUSD pair.
After yesterday’s crash, the Chinese stocks recovered helping its Asian peers to pair losses, but traders remained cautious and preferred to remain in a wait-and-see mode.
From the technical point of view, AUDUSD staged quite a solid bounce and now seesaws between 0.6714 and 0.6720. The major stays in the green, gaining around 0.40% on a daily basis. The resistance is seen at $0.6730, $0.6760-70 and $0.6815 while support lies at $0.6685, $0.6600 and $0.6500. If the coronavirus issue takes backseat and the risk-on semtiment reemerges, the pair may continue its bullish trend, but the negative-to-cautious market mood prevents it from rising on a sustainable manner, at least, for the time being.