AUD/USD struggles to capitalize on the attempted recovery, holds steady below 0.6300 mark

The AUD/USD pair consolidated its Asian session recovery gains and was seen oscillating in a narrow trading band near session tops, just below the 0.6300 round-figure mark.

The pair gained some positive traction on the last trading day of the week and recovered a part of the previous session's steep decline to fresh 11-year lows, led by a strong revival in the US dollar demand.

The recent rout in the global equity markets – amid growing concerns over the coronavirus outbreak – provided a strong boost to the greenback's status as the global reserve currency on Thursday.

The market worries intensified after the World Health Organization declared the novel coronavirus a global pandemic and the US President Donald Trump suspended all travel from Europe for 30 days.

The pair nosedived to its lowest level November 2008 but managed to find some support ahead of the 0.6200 round-figure mark after the Fed moved to calm an unusual disruption in the US Treasury markets.

The Fed announced that it will inject more than $1.5 trillion of temporary liquidity into the short-term funding markets. This was followed by the BoJ's move to inject 500 billion yen into the system.

The coordinate move by major central banks led to a turnaround in the global risk sentiment, which eventually extended some support to perceived riskier currencies, including the Australian dollar.

Meanwhile, the uptick lacked any strong bullish conviction and might still be categorized as a corrective bounce, which runs the risk of fizzling out rather quickly amid deepening panic about the coronavirus.

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

Technical levels to watch