• The prevalent risk-on mood continued lending some support to the aussie.
• Sustained USD buying, deteriorating US-China relations might cap the upside.
• The ADP report showed private-sector employment declined by 20.236 million.

The AUSD/USD pair quickly reversed a mid-European session dip to the 0.6415 region and refreshed daily tops, around mid-0.6400s in the last hour.

The prevalent risk-on mood, amid the latest optimism over the easing of coronavirus-induced lockdowns in some parts of the world, continued lending some support to perceived riskier currencies – like the aussie.

However, a combination of factors, including a strong bid tone surrounding the US dollar and worsening US-Chia relation, held investors from placing any aggressive and kept a lid on any runaway rally for the major.

The greenback gained some follow-through traction on Wednesday and remained well supported by its status as the global reserve currency amid concerns over the severity of the economic damage caused by the virus outbreak.

The market worries were reinforced by the latest US ADP report, which showed that private-sector employment declined by a massive 20.236 million in April. This was accompanied by a downward revision of the previous month's reading.

Apart from the USD price dynamics, a US-China spat over the origin of the coronavirus and the US President Donald Trump's threat to impose fresh tariffs on Chinese goods might further collaborate towards capping the China-proxy Australian dollar.

Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the overnight swing high level of 0.6476, before traders start positioning for any further near-term appreciating move for the major.

Technical levels to watch