AUD/USD trades with modest losses, holds above mid-0.5700s

• The ongoing downward spiral in the global equity markets exerted some pressure on the aussie.
• The US Senate’s failure to pass the COVID-19 bill weighed on the USD and exerted some support.
• The global rush to hoard cash helped limit the USD downside and kept a lid on any further gains.

The AUD/USD pair traded with a mild negative bias on Monday, albeit has managed to hold above the Asian session swing lows to the 0.5700 mark.

Following Friday's sharp intraday pullback from the vicinity of the key 0.60 psychological mark, the pair met with some fresh supply on the first day of a new trading week amid the ongoing downward spiral in the global equity markets.

Growing fears over the economic fallout from the coronavirus pandemic, leading to a global recession continued weighing on investors' sentiment and exerted some downward pressure on perceived riskier currencies – like the aussie.

However, some aggressive US dollar selling, triggered by the US Senate’s failure to pass the COVID-19 rescue package bill and tumbling US Treasury bond yields, extended some support and helped limit deeper losses, at least for the time being.

Meanwhile, the fact that investors have been selling everything amid concerns about tightening liquidity conditions extended some support to the greenback's status as the global reserve currency and kept a lid on the pair's attempted intraday recovery.

Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for an extension of last week's recovery move from the 0.5500 psychological mark, or over 17-year lows.

Technical levels to watch