• A combination of factors assisted AUD/USD to gain traction on Wednesday.
  • A goodish pickup in the USD demand kept a lid on any meaningful upside.
  • The formation of an upward sloping trend channel favours bullish traders.

The AUD/USD pair edged higher on Wednesday and might now be looking to build on the overnight rebound from the vicinity of the mid-0.7000s support zone.

The Australian dollar drew support from the Reserve Bank of Australia's hawkish signal that a bigger interest rate hike is still possible in June amid the upside risks to inflation. Adding to this, a modest bounce in the global risk sentiment further benefitted the risk sensitive aussie, though the emergence of some US dollar buying capped gains ahead of the FOMC minutes.

From a technical perspective, the recent strong recovery from the YTD low has been along an upward sloping channel, which points to a well-established short-term bullish trend. The lower boundary of the said trend channel coincides with the 100-hour SMA and should act as a pivotal point. This is closely followed by the 23.6% Fibonacci retracement of the 0.6829-0.7128 rally.

A convincing break below the latter will be seen as a fresh trigger for bearish traders and prompt aggressive technical selling. The AUD/USD pair might then accelerate the downfall towards the 38.2% Fibo. level, around the 0.7015 region. The bearish trend could further get extended towards the 0.7000 psychological mark en-route the 50% Fibo. level near the 0.6980 area.

On the flip side, momentum beyond the weekly high, around the 0.7125 region, has the potential to lift spot prices to the ascending channel resistance, around the 0.7175-0.7180 zone. Some follow-through buying would mark a fresh bullish breakout and pave the way for a move beyond the 0.7200 round figure, towards testing the 200-day SMA, currently around the 0.7260-0.7265 area.

AUD/USD 1-hour chart

fxsoriginal

Key levels to watch

AUD/USD

Overview
Today last price 0.7104
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 0.7104
 
Trends
Daily SMA20 0.7038
Daily SMA50 0.7271
Daily SMA100 0.7234
Daily SMA200 0.726
 
Levels
Previous Daily High 0.7114
Previous Daily Low 0.7056
Previous Weekly High 0.7074
Previous Weekly Low 0.6872
Previous Monthly High 0.7662
Previous Monthly Low 0.7054
Daily Fibonacci 38.2% 0.7078
Daily Fibonacci 61.8% 0.7092
Daily Pivot Point S1 0.7069
Daily Pivot Point S2 0.7033
Daily Pivot Point S3 0.701
Daily Pivot Point R1 0.7127
Daily Pivot Point R2 0.715
Daily Pivot Point R3 0.7186

 

 

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