AUD/USD Price Analysis: Bounces off lows, not out of the woods yet

The AUD/USD pair quickly recovered around 35 pips from daily swing lows and was last seen trading with only modest losses, around the 0.7670 region.

The US dollar trimmed a part of its intraday gains to three-and-half-month tops and extended some support to the AUD/USD pair. Apart from this, a sudden pick up in the US equity futures provided an additional boost to the perceived riskier aussie.

From a technical perspective, the pair once again attracted some buying ahead of the 38.2% Fibonacci level of the 0.7027-0.8008 positive move. The mentioned support is pegged near the 0.7620 region and should now act as a key pivotal point for traders.

Given Friday's sustained break below 50-day SMA, the near-term bias might have shifted in favour of bearish traders. The negative outlook is reinforced by the fact that oscillators on the daily chart have just started drifting into the bearish territory.

Sustained weakness below the 38.2% Fibo. support will reaffirm the bearish bias and pave the way for an extension of the recent retracement slide from the key 0.8000 psychological mark. The AUD/USD pair might then turn vulnerable to break below the 0.7600 mark.

The downward trajectory could then get extended towards testing 100-day SMA support, currently near the 0.7545-40 region. The AUD/USD pair could eventually drop to the 50% Fibo. level, around the key 0.7500 psychological mark.

On the flip side, the 50-DMA, coinciding with the daily swing highs, around the 0.7740-45 region, should now act as a strong resistance. This is closely followed by 23.6% Fibo. level resistance near the 0.7765-75 congestion zone.

A convincing breakthrough will negate any near-term negative bias and prompt some short-covering move. The subsequent positive move has the potential to lift the AUD/USD pair back above the 0.7800 mark, towards testing the 0.7830-40 supply zone.

AUD/USD daily chart

Technical levels to watch