AUD/USD Price Analysis: Defend 50% Fibo. support, retakes 0.6700 mark on softer USD
|- AUD/USD regains positive traction on Tuesday and draws support from a softer USD.
- Repeated failures to find acceptance below the 50% Fibo. level warrant caution for bears.
- A sustained strength beyond the 0.6730 area will negate any near-term negative outlook.
The AUD/USD pair once again find some support near the 50% Fibonacci retracement level of the May-June rally and attracts fresh buying during the Asian session on Tuesday. Spot prices surge back above the 0.6700 round figure in the last hour, though any meaningful upside still seems elusive.
The US Dollar (USD) continues with its struggle to make it through the 50-day Simple Moving Average (SMA) and remains on the defensive for the second straight day, which, in turn, is seen lending some support to the AUD/USD pair. That said, the Federal Reserve's (Fed) hawkish outlook, along with worries about a global economic downturn, could act as a tailwind for the safe-haven buck and cap gains for the risk-sensitive Aussie.
From a technical perspective, bearish traders need to wait for a sustained break and acceptance below the 50% Fibo. level before placing fresh bets. Given that oscillators on the daily chart are holding in the negative territory, the AUD/USD pair might then accelerate the fall towards the 61.8% Fibo. support, around the 0.6625 region. This is followed by the 0.6600 mark, which if broken decisively will set the stage for a further depreciating move.
On the flip side, any subsequent move up is more likely to confront stiff resistance near the 38.2% Fibo. level, around the 0.6730 zone. A sustained strength beyond will suggest that the recent corrective decline from the 0.6900 mark, or a nearly four-month high, has run its course and shift the bias in favour of bullish traders. The AUD/USD pair might then aim to reclaim the 0.6800 round figure, which coincides with the 23.6% Fibo. level.
AUD/USD daily chart
Key levels to watch
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