AUD/USD clings to modest recovery gains, around mid-0.7000s

• A modest USD profit-taking assisted AUD/USD to gain some traction on Monday.
• The risk-on mood provided an additional boost to the perceived riskier aussie.
• Coronavirus jitters might continue to benefit the safe-haven USD and cap gains.

The AUD/USD pair edged higher on the first day of a new trading week and recovered the previous day's losses to over two-month lows.

The pair stalled its recent bearish trajectory and managed to attract some buying near 100-day SMA support, around the key 0.7000 psychological mark. A modest US dollar pullback assisted to AUD/USD pair gain some positive traction and snap six consecutive days of the losing streak.

Worries about the lack of any further US fiscal stimulus measures and political uncertainty in the run-up to the US presidential election in November prompted some USD profit-taking on Monday. This, coupled with the upbeat market mood, further benefitted the perceived riskier aussie.

However, concerns about the economic fallout from the second wave of the coronavirus infections continued lending some support the greenback's status as the global reserve currency. This, in turn, might keep a lid on any runaway rally for the AUD/USD pair, at least for the time being.

There isn't any major market-moving economic data due for release on Monday. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the AUD/USD pair might have already bottomed out in the near-term and positioning for any meaning recovery.

The market focus now shifts to the US presidential debate on Tuesday. This, along with the release of the US economic data later this week, will influence the USD price dynamics and assist investors to determine the AUD/USD pair's next leg of a directional move.

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