AUD/USD Price Analysis: Bulls have the upper hand above one-month-old ascending trend-line
|- A combination of supporting factors pushed AUD/USD higher for the second straight day.
- The overnight bounce from an ascending trend-line supports prospects for further gains.
- A move beyond 100-DMA will reaffirm the constructive outlook and prompt fresh buying.
The AUD/USD pair built on the previous day's positive move and gained some follow-through traction for the second successive day on Wednesday. The pair maintained its bid tone through the first half of the European session and was last seen trading near a two-day high, around mid-0.7200s.
Retreating US Treasury bond yields undermined the US dollar, which, in turn, was seen as a key factor that provided a modest lift to the AUD/USD pair. Apart from this, a positive turnaround in the risk sentiment further benefitted the perceived riskier aussie and remained supportive.
From a technical perspective, this week's corrective slide from the highest level since November 19 stalled near an ascending trend-line extending from the key 0.7000 psychological mark. The aforementioned support, currently around the 0.7180-75 region should now act as a pivotal point.
Technical indicators on the daily chart have just started moving into positive territory. This, along with the emergence of dip-buying on Tuesday and the subsequent move up, favours bullish traders and supports prospects for further near-term appreciation.
A move back towards challenging the 100-day SMA barrier, just ahead of the 0.7300 round-figure mark, remains a distinct possibility. Some follow-through buying has the potential to lift the AUD/USD pair towards the 0.7340-45 area en-route the 0.7375-80 zone and the 0.7400 mark.
On the flip side, a convincing break below the ascending trend-line support, near the 0.7180-75 region, will shift the bias back in favour of bearish traders. The AUD/USD pair might then turn vulnerable to accelerate the fall back towards the 0.7100 round-figure mark.
The downfall could further get extended towards intermediate support near the 0.7085 horizontal zone before the AUD/USD pair eventually drops to 2021 low, around the 0.7000 mark.
AUD/USD daily chart
Levels to watch
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