The aussie failed to get much reprieve from the risk rebound yesterday

AUD/USD D1 31-01

AUD/USD continues to stay a little pressured to start the day as price is lingering around 0.6715 currently, sitting just above the 0.6700 handle.

The aussie failed to get much reprieve from the rebound in risk appetite overnight and as such, the currency pair is still in a precarious spot to start the European morning.

There is talk of a barrier option at 0.6700 so just be mindful of that in trading today as a run below it may trigger some stops as sellers chew through support around 0.6675-90 as well.

The pair has not posted a daily close below the 0.6700 level since 2009 so that will be something to keep in mind ahead of the weekend.

I still reckon there is room for the pair to weaken as markets may not have entirely come to terms with the potential implications of the coronavirus outbreak just yet.

I mean the Chinese economy is not going to be running at full capacity for quite a while and the spillover effects to other countries in the region and globally still cannot be properly or accurately quantified at the moment.

That realisation may come back to haunt risk trades down the road but with AUD/USD keeping around 0.6715 now, there is little risk-reward to go chasing a downside break if you have not gotten into the trade earlier already.

The next best opportunity will be to chase the run once stops are taken out below 0.6700 but we'll cross that bridge when we come to it.