AUD/USD steadies near 0.6550 as markets wait for US response to coronavirus

• NAB's Business Confidence Index dropped to -4 in Australia.
• US Dollar Index erases portion of early recovery gains.
• White House is reportedly not ready to announce the economic response to coronavirus.

After slumping to its lowest level in 11 years at 0.6320 on Monday, the AUD/USD pair recovered the majority of its daily losses and closed at 0.6600 but struggled to push higher. With the USD gathering strength on Tuesday, the pair turned south, once again, and slumped to 0.6550 before going into a consolidation phase. As of writing, the pair was down 0.45% on the day at 0.6555.

Earlier in the day, the data published by the National Bank of Australia showed that the Business Confidence Index in February slumped to -4 from -1 in January and missed the market expectation of 0. Moreover, the Business Conditions Index dropped to 0 and fell short of analysts' estimate of 3 to weigh on the AUD.

DXY recovery loses momentum

On the other hand, boosted by a decisive recovery seen in the US Treasury bond yields, the greenback outperformed its major rivals during the first half of the day and kept the bearish pressure on the pair intact.

However, after CNBC reported that White House was not ready to introduce economic measures to help the economy combat the negative impact of coronavirus, the US Dollar Index (DXY) lost its traction and allowed the pair to limit its losses. As of writing, the DXY, which tested the 96 handle during the European session, was still up 0.65% on the day at 95.70.

In the early trading hours of the Asian session on Wednesday, Westpac Consumer Confidence Index, Home Loans and Investment Lending for Homes data from Australia will be looked upon for fresh impetus.

Technical levels to watch for