As risk sentiment goes, so goes AUD/USD -- and that means lower after the ECB unexpectedly sharp dovish turn nL1N20U0QJ.
Though AUD/USD initially firmed along with risk sentiment in the initial reaction to the ECB the mood turned sour as global bond yields collapsed on fears that the ECB was sensing that the global growth slowdown could deepen nL1N20U0SY.
Slumps in equity and commodity markets reflect those concerns and bolster the risk-off sentiment nL1N20U0PE.
AUD/USD's overnight gains eroded as the greenback received broad based safe-haven flows.
The neckline of the head and shoulder top and the 50 percent Fib of 0.6715-0.7295 are threatened again after the AUD/USD's earlier lift stalled near the daily cloud base.
AUD/USD is struggling but price action is somewhat muted as the market now awaits the February U.S. jobs report.
Should results show upside surprises to payrolls and wage growth the U.S. rate complex is likely to firm as the Fed's patient stance will be questioned, even though today's ECB action may have bolstered the perceptions that the U.S. central bank can remain on hold for a while.
In any event, rising U.S. rates could fuel sharp greenback gains that would could help complete the head and shoulders top and break the Fib, which would open the way to the 0.6800 area.
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