The AUD/USD closed at 0.68684 after placing a high of 0.69618 and a low of 0.68625. The AUD/USD pair fell below 0.6900 level on Wednesday amid the risk-off market sentiment and broad-based U.S. dollar strength. Aussie faced renewed downward pressure as the market's risk appetite went off due to an increased number of coronavirus cases throughout the globe.
On Wednesday, the U.S. dollar took bids due to its safe-haven status and risk-averse market environment amid concerns that the rising number of appearing cases from more than half of U.S. states could lead to economic damage, and hence, the safe-haven greenback gained traction. The U.S. Dollar Index was up 0.6% on the day at 97.14 level. The strength of the U.S. dollar dragged the AUD/USD pair towards the downside, and the pair started posting losses on Wednesday.
The latest data showed that confirmed cases of COVID-19 in Florida were increased by 5.3%, hospitalization in Texas rose by 7.3%, and in California, the infection cases jumped to 7149 from 5019 on Tuesday. Wall Street Journal and the global equities were dragged to a lower level on the back of increased fears of the second wave of coronavirus, which also boosted the greenback. Meanwhile, the only data from the U.S. was HPI for April, which declined to 0.2% from the expected 0.3% and weighed on the U.S. dollar, which kept a lid on additional losses of AUD/USD pair on Wednesday.
Furthermore, the escalating tensions between U.S. & China also weighed on AUD/USD pair as the non-stop bullying of U.S. to China and China back to back replies have increased the fears of Cold-war between U.S. & China. The global economy has already suffered a lot due to COVID-19, and the two biggest economies have not stopped for once to provide a cool breath to the global economy. On Wednesday, the director of the Center on US-China relations at the Asia Society, Orville Schell, said that "we're essentially in the beginnings of a Cold-War." These comments weighed heavily on the China-proxy currency Aussie which dragged the par UAD/USD with itself on Wednesday.
Daily Technical Levels
Pivot point: 0.6900
The AUD/USD is consolidating in a broad trading range of 0.6975 - 0.6804, and it's been showing choppy sessions in between this range. It seems like the lack of direct fundamentals are keeping Aussie on hold. To see more buying Aussie should break above 0.6975 level, which can lead the AUD/USD prices further higher until 0.7065 level. On the lower side, a bearish crossover of 50 EMA can lead Aussie towards 0.6800. Let's consider staying bearish below 0.6975 level today. Good luck!