AUD/USD: Bears catch a breather above 0.7200 after November’s heaviest drop

• AUD/USD stays depressed near one week low of 0.7222.
• COVID-19 fears gain momentum and so Sino-American, Aussie-China tussles.
• Wall Street benchmarks, US 10-year Treasury yields weaken as vaccine hopes fizzle.
• Light calendar in Asia highlights risk catalysts for fresh impulse.

AUD/USD wavers around 0.7225/30, bouncing off a one-week low of 0.7222, at the start of Friday’s Asian session. The aussie pair marked the biggest losses in three weeks the previous day as trading sentiment soured amid worsening coronavirus (COVID-19) conditions in the US and Europe. The tension between the US and China, also among Beijing and Canberra, joined the receding optimism for the COVID-19 vaccine to exert an additional downside burden on the market mood.

Virus woes supersede vaccine hopes…

With the record covid cases in the US, not to forget the highest virus-led deaths since May, the pandemic is worsening in the world’s largest economy. This leads Chicago to follow the footsteps of New York and restrict activities. On the other hand, Fed Chair Jerome Powell raised doubts over vaccine-led complacency and offered additional challenges to the risks.

China regains global attention with its trade/political tussles with America and Australia. After the US warned Beijing, indirectly, over the Hong Kong crackdown during Thursday’s Asian session, the Trump administration prepares to limit investments in the Chinese companies, per Reuters, before a few hours. On the flip side, the dragon nation banned Victorian timber logs.

Economics also dwindle as US inflation for October failed to entertain the markets, neither the Weekly Jobless Claims, whereas Australia’s Consumer Inflation Expectations grew past market consensus and forecast.

Wall Street benchmarks couldn’t ignore the downbeat market mood while trimming the week’s heavy gains whereas the US 10-year Treasury yields declined 10 basis points (bps) to 0.885%, the most in more than a week by the end of Thursday’s trading.

Considering a lack of major data/events on the Asian calendar, risk headlines are the major catalysts to watch.

Technical analysis

Despite dropping below October’s high of 0.7244, AUD/USD stays above 50-day SMA near 0.7170, which in turn keeps the buyers hopeful. Though, major bulls are less likely to be interested unless witnessing a fresh high of the month, currently 0.7340.