A combination of factors assisted AUD/USD to regain positive traction on Wednesday
The AUD/USD pair attracted some dip-buying on Wednesday and inched back closer to over a three-week top touched the previous day, with bulls still awaiting a sustained move beyond the 0.7200 mark. The Australian dollar drew some support from the better-than-expected Q1 GDP print, which raised bets for an outsized 40 bps rate hike by the Reserve Bank of Australia at its upcoming meeting next week. Apart from this, a generally positive risk tone was seen as another factor that benefitted the risk-sensitive Aussie, though modest US dollar strength kept a lid on any further gains for the AUD/USD pair. From a technical perspective, the overnight downfall stalled near the 0.7662-0.6829 downfall.
The said support, around the 0.7150-0.7145 region now coincides with the lower boundary of an ascending channel extending from the YTD low touched in May and should act as a pivotal point. A convincing break below will shift the bias in favor of bearish traders. Some follow-through selling below the 200-period SMA on the 4-hour chart, currently around the 0.7120 region, will reaffirm the negative bias and make the AUD/USD pair vulnerable.
Spot prices might then weaken further below the 0.7100 mark and accelerate the fall towards the next relevant support near the 0.7025-0.7020 region, en-route the 0.7000 psychological mark. Meanwhile, oscillators on daily/4-hour charts are holding comfortably in the positive territory and support prospects for additional gains. That said, it will still be prudent to wait for a sustained move beyond the 0.7200 mark before placing fresh bullish bets. Any subsequent move up, however, is likely to confront resistance near the 100-day SMA, around the 0.7235-0.7245 region. The said barrier also represents a level near the 0.7260 zone. A convincing breakthrough the latter would be seen as a fresh trigger for bullish traders and pave the way for an extension of a near three-week-old upward trajectory.
Spot prices might then weaken further below the 0.7100 mark and accelerate the fall towards the next relevant support near the 0.7025-0.7020 region, en-route the 0.7000 psychological mark. Meanwhile, oscillators on daily/4-hour charts are holding comfortably in the positive territory and support prospects for additional gains. That said, it will still be prudent to wait for a sustained move beyond the 0.7200 mark before placing fresh bullish bets. Any subsequent move up, however, is likely to confront resistance near the 100-day SMA, around the 0.7235-0.7245 region. The said barrier also represents a level near the 0.7260 zone. A convincing breakthrough the latter would be seen as a fresh trigger for bullish traders and pave the way for an extension of a near three-week-old upward trajectory.