AUD/USD trades with modest losses, below mid-0.6100s

The AUD/USD pair edged lower during the early European session and is currently placed near the lower end of its daily trading range, around the 0.6120 region.

The pair met with some supply on the first day of a new trading week and for now, seems to have stalled its recent recovery move from the vicinity of the key 0.5500 psychological mark, or 17-year lows. The pair snapped six consecutive days of the winning streak and the downtick was sponsored by a goodish pickup in the US dollar demand.

As investors digested the Fed's unlimited QE, the optimism over the passage of a massive $2.2 trillion US economic stimulus package eased the recent USD bearish pressure. This coupled with a prolonged period of uncertainty – amid tightening coronavirus lockdowns across the world – further benefitted the greenback's perceived safe-haven status against the aussie.

However, the fact that the United States has the highest number of new coronavirus cases in the world, investors now seemed increasingly worried about its impact on the economy and expect that the Fed will add to its recent stimulus measures. This should eventually cap any strong USD gains and help limit deeper losses for the major, at least for now.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the pair's recent corrective bounce might have already run out of the steam and positioning for the resumption of the pair's prior/well-established bearish trend.

Technical levels to watch