AUD/USD fails to extend rebound, edges lower toward 0.6500
- AUD/USD remains under bearish pressure for second straight day.
- Sour market mood dampens demand for risk-sensitive currencies on Friday.
- US Dollar Index clings to recovery gains near 99.80.
The AUD/USD pair posted modest daily losses on Thursday after closing the previous three days in the positive territory. With financial markets turning risk-averse on Friday, the pair continued to push lower.
Although it seemed as if the pair found support near 0.6510 during the European session, the recovery attempt remained short-lived. As of writing, AUD/USD was down 0.7% on the day at 0.6518.
USD looks to end week on strong footing
The USD capitalized on risk-off flows on Friday and weighed on the pair. The US Dollar Index, which tracks the greenback's performance against a basket of six major currencies, is now up 0.4%on a daily basis at 99.82. In the absence of significant macroeconomic data releases, the risk sentiment is likely to continue to drive the pair's action.
Earlier in the day, Dr Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, said the early results from the phase 1 study of Moderna’s Covid-19 vaccine were a good sign. The initial reaction to this comment helped S&P 500 futures turn positive on the day but Wall Street's main indexes don't seem to be looking to open decisively higher.
Meanwhile, heightened US-China tensions also make it difficult for China-proxy AUD to stay resilient against its major rivals. During the Asian session, China’s Foreign Ministry in a statement reiterated that China will fight back if the US tries to oppress them.
Technical levels to watch for