AUD/USD's bullish cycle could be coming to an end as worries mount over the Australian economy, Covid-19 and a rebounding U.S. dollar.
Australia fell into its deepest economic slump on record last quarter as coronavirus curbs paralysed business activity.
Fresh outbreaks threaten to upend any immediate recovery, putting pressure on the government to keep fiscal taps open nL4N2FZ0IU.
A plot of the AUD/USD daily returns since the start of 2020 shows the Australian dollar has been quite volatile.
It also reveals AUD/USD had the single worst daily drop compared with EUR/USD, USD/JPY and GBP/USD.
It is not an ideal candidate to shelter from the coronavirus pandemic's effects, as in times of uncertainty funds usually flow out of the Australian dollar.
AUD/USD is at risk of a deeper drop towards the rising 30-day moving average, now at 0.7200, a break below which could see a much bigger fall to the 0.7000 psychological level.
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