Australian shares went down on Thursday, as a fresh cluster of COVID-19 cases sparked a lockdown in the state of South Australia while numbers in the United States also increased, denting recent optimism over promising vaccine trial results.

Most businesses in South Australia will close except for some food outlets, and people will be largely confined to their homes, as the state tries to avoid a more severe breakout like the one that all but shuttered neighboring Victoria for more than 100 days.

“The outbreak of COVID-19 in South Australia has unsurprisingly generated considerable concern given it happened so quickly and after a number of months without any locally acquired transmission,” analysts at ANZ wrote. He also said that “Google searches for “COVID testing” in South Australia have surged. The per capita level of searching is exceeding that of Victoria during its peak.”

Australian jobs surged past all expectations in October led by an easing of virus restrictions in the second-most populous state of Victoria, though the unemployment rate still ticked up to 7.0% as more people went out looking for work. Figures from the Australian Bureau of Statistics (ABS) on Thursday showed employment escalated by a solid 178,800 in October, after slipping in September. Economists were predicting a fall of 30,000 with the unemployment rate rising to 7.2%.

On the other hand, during the overnight trade, the risk sentiment weakened with investors selling the US stocks on fears of renewed corona virus lockdown restrictions.

Comments from the World Health Organization Director Michael Ryan that vaccines would be available in large numbers in four to six months forced investors to scale back the optimism and consider the possibility of a near-term economic slowdown. Further, the US House Speaker Nancy Pelosi’s rigid stand on the stimulus package worked against the equities.

AUD/USD 4 Hour Chart:

Support: 0.7271 (S1), 0.7242 (S2), 0.7213 (S3).

Resistance: 0.7330 (R1), 0.7360 (R2), 0.7389 (R3).

The lock-down in Australia due to covid 19 spread and increasing unemployment rate pressurizes Aussie against greenback, we expect an bearish trend for AUD/USD.