AUD/USD eases to its lowest level since 19 December 2019
The aussie is in a bit of a precarious spot amid the softer risk mood in trading today, with AUD/USD now slipping to one-month lows and testing the 100-day MA (red line) @ 0.6844.
If price firmly breaks/closes below that level today, it will give sellers added momentum to build further on a downside move potentially towards 0.6800-10 next.
As things stand, there is the broken trendline resistance-turned-support level to also keep an eye out for but in my view, the 100-day MA holds more technical significance.
Right now, it is all about heightened fears - or at least the perception of it - surrounding the China virus outbreak. However, looking further out, if this doesn't turn into a real pandemic, then there is every chance the market will fade the move we're seeing today.
That said, for the aussie things may be a bit more tricky this week. On Thursday, we will have the Australian labour market report release. That is a key data to watch for ahead of the 4 February RBA monetary policy meeting.
Right now, cash rate futures are pricing in ~53% odds of a 25 bps rate cut in two weeks' time. The labour market report - depending on what it says - may well have a good say in skewing those odds to one side or another in the aftermath.
