AUD/USD hangs near multi-year lows, just below 0.60 mark

• AUD/USD struggled to capitalize on its early attempted recovery.
• Some renewed weakness in equity markets seemed to cap gains.
• A modest USD pullback might lend some support, at least for now.

The AUD/USD pair failed to capitalize on its early uptick and has now dropped to the lower end of its daily trading range, back below the key 0.60 psychological mark.

The pair gained some traction during the Asian session on Wednesday amid moved away from near 17-year lows after the RBA announced A$ 10.7 billion worth of liquidity infusion via repo actions.

On the other hand, the US dollar eroded a part of the overnight strong gains and remained supportive, albeit the pair failed to capitalize on the move amid some renewed weakness in the equity markets.

Despite coordinated efforts by global central banks and various government measures, concerns over the economic fallout from the coronavirus pandemic continued weighing on investors’ sentiment.

This eventually failed to provide any meaningful respite for the perceived riskier Australian dollar, which held bulls from placing any aggressive bets and seemed to be the only factors capping any strong gains.

Meanwhile, some follow-through uptick in the US Treasury bond yields might limit any further USD downside, which might now set the stage for a further near-term depreciating move for the major.

Hence, any attempted recovery runs the risk of fizzling out rather quickly and might still be seen as a selling opportunity as the focus remains on developments surrounding the coronavirus saga.

Technical levels to watch