AUD/USD sticks to modest gains above 0.6600 mark, lacks follow-through

• AUD/USD catches some bids on Tuesday and recovers further from multi-year lows.
• Concerns over the economic impact of the coronavirus kept a lid on any further gains.

The AUD/USD pair seemed struggling to build on its intraday gains and was seen oscillating in a range above the 0.6600 round-figure mark.

The pair gained some follow-through traction during the Asian session on Tuesday and extended the previous session's attempted recovery move from 11-year lows, led by a modest US dollar pullback.

The upside seems limited

The risk-off mood-led intraday slump in the US Treasury bond yields, coupled with fresh Fed rate cut speculations prompted some USD long-unwinding and extended some support to the major.

This coupled with a slight improvement in the global risk sentiment provided an additional boost to the perceived riskier currency – Australian dollar – and remained supportive of the positive move.

However, market concerns about the negative impact of the deadly coronavirus outbreak on the Chinese economy held investors from placing any aggressive bets around the china-proxy aussie.

Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have already bottomed out in the near-term and positioning for any further recovery.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of the Conference Board’s Consumer Confidence Index, for some short-term trading impetus.

Technical levels to watch