AUDUSD Falls to New 11-Year Lows as Coronavirus Fears Intensify Following the G20 Meetings
AUDUSD is trading at its lowest levels since March 2009. As of this writing, the currency pair is hovering around the 0.6600 psychological handle. If there are enough sellers left in the market, it could slide lower to its 2008 low at 0.5990 which is where it bottomed following the US financial crisis.
Over the weekend, leaders from the G20 countries convened in Saudi Arabia. With the number of confirmed coronavirus cases already at 79,360 and the death toll at 2,619, it was difficult for them to ignore the outbreak. IMF Director Kristalina Georgieva warned that Chinese economic growth could slow to 5.6% this year. South Korea expressed its concerns about its economic recovery as its confirmed cases rose by 161 to 763 and recorded 7 deaths.
These worries heavily weighed on the Australian dollar more than the other risk currencies particularly because of the RBA’s recent meeting minutes. A couple of weeks ago, the report described the coronavirus outbreak as a source of uncertainty. While the central bank sounded optimistic, the minutes revealed that easing is completely off the table. Of course, these worried remarks from key officials this weekend only fueled speculations that the RBA may announce a rate cut (or at least sound dovish at its March 3 meeting).
On the 1-hour chart, we can see that the currency pair has managed to recoup most of its losses and close the weekend gap. It is now trading above the 0.6600 handle. This recent price action could indicate that the market may retrace some of its losses back to the 61.8% Fib level (drawing from the high of February 19 to today’s low) at 0.6660. This price also coincides with the 100 SMA.
On the other hand, a close below today’s low could mean that AUDUSD is on its way to its 2009 lows.