AUD/USD clings to modest gains, holds comfortably above 0.6700 mark

• AUD/USD regains some positive traction on the first day of a new trading week.
• Improving risk sentiment remained supportive, stronger USD seemed to cap gains.

The Australian dollar held firm against its American counterpart and lifted the AUD/USD pair back closer to last week's swing high level of 0.6750.

Following a modest downtick over the past two sessions, the pair managed to regain some positive traction on the first day of a new trading week and was being supported by improving global risk sentiment.

The upside seems limited

As investors assessed the latest reading on coronavirus cases in the Hubei Province, expectations of more stimulus from China turned out to be one of the key factors lending some support to the China-proxy aussie.

On the other hand, the US dollar consolidated its recent strong gains and stood tall near 4-1/2 month tops, which eventually might keep a lid on any strong follow-through positive move, at least for the time being.

This coupled with the fact that the US bank will remain closed on Monday in observance of Presidents' Day further held investors from placing any aggressive bullish bets and might eventually cap gains for the major.

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

Technical levels to watch