AUD/USD clings to gains above 0.6900 handle, lacks follow-through

   •  The USD remains on the defensive amid growing bets for a Fed rate cut.
   •  US-China trade tensions might keep a lid on any strong follow-through.

The AUD/USD pair traded with a mild positive bias at the start of a new trading week and is currently placed at near two-week tops, just below mid-0.6900s.

The pair built on last week's goodish bounce from multi-month lows and the uptick was supported by a softer tone surrounding the US Dollar, which remained on the defensive amid growing bets for a Fed rate cut.

The greenback retreated farther from two-year tops and continues to be weighed down by Friday's weaker than expected US durable goods orders data, which added to the view that the economy is losing momentum.

The report came a day after the US data indicated that manufacturing activity in May dropped to the slowest pace in almost a decade and fueled speculations that the Fed might consider cutting rates before the year-end. 

However, the recent escalation in the US-China trade tensions, which had been one of the key factors influencing sentiment surrounding the China-proxy Australian Dollar, might keep a lid on any runaway rally.

Meanwhile, the US President Donald Trump's latest comments, saying that we are not ready to make a deal with China clearly suggested that the world's two largest economies are nowhere near to reach any trade pact.

Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term or positioning for any further near-term recovery move. 

Technical levels to watch