AUD/USD Price Analysis: Bulls retain control post-US Retail Sales, below 0.7050 confluence

AUD/USD gained traction for the third successive day and surged past the 0.7000 mark on Tuesday.
Hawkish RBA meeting minutes, the risk-on impulse benefitted the aussie amid a weaker greenback.
Bulls might now wait for sustained strength beyond the 0.7050 confluence before placing fresh bets.

Haresh Menghani FXStreet

The AUD/USD pair held on to its strong intraday gains through the early North American session and was last seen trading around the 0.7020 area, just a few pips below the daily high.

The Reserve Bank of Australia, in the minutes of its last meeting released on Tuesday, signalled that a bigger interest rate hike is still possible in June amid the upside risks to inflation. This, in turn, boosted the Australian dollar and pushed the AUD/USD pair higher for the third successive day amid broad-based US dollar weakness.

The risk-on impulse - as depicted by a strong rally in the global equity markets - turned out to be a key factor that weighed heavily on the safe-haven greenback. The USD bulls seemed rather unimpressed by a goodish pickup in the US Treasury bond yields and also shrugged off stronger-than-expected US monthly Retail Sales figures for April.

From a technical perspective, acceptance above the 0.7000 psychological mark, which coincided with the 38.2% Fibonacci retracement level of the 0.7267-0.6829 fall, was seen as a key trigger for the AUD/USD bulls. The subsequent move up, however, stalled just ahead of the 0.7050 confluence resistance, which should now act as a key pivotal point.

The said barrier comprises the 50% Fibo. level and the 200-period SMA on the 4-hour chart, which if cleared decisively would set the stage for an extension of the AUD/USD pair's recovery move from the YTD low. Bulls might then aim to challenge the 61.8% Fibo. level, around the 0.7100 mark, en-route the 0.7135-0.7140 resistance zone.

On the flip side, the 0.7000 mark (38.2% Fibo. level) now seems to protect the immediate downside ahead of the 0.6970 region. This is followed by the 23.6% Fibo. level, around the 0.6935-0.6930 zone, which if broken decisively will suggest that the corrective bounce has run its course and prompt fresh selling around the AUD/USD pair.

Spot prices could then slide further below the 0.6900 round-figure mark and retest the overnight swing low, around the 0.6870 zone. Some follow-through selling would make the AUD/USD pair vulnerable to prolonging the depreciating move and challenge the YTD low, around the 0.6830-0.6825 region, before dropping to the 0.6800 mark.

AUD/USD 4-hour chart

Key levels to watch

AUD/USD

Overview
Today last price	0.7024
Today Daily Change	0.0053
Today Daily Change %	0.76
Today daily open	0.6971

Trends
Daily SMA20	0.7112
Daily SMA50	0.7298
Daily SMA100	0.7245
Daily SMA200	0.7269

Levels
Previous Daily High	0.6983
Previous Daily Low	0.6872
Previous Weekly High	0.7074
Previous Weekly Low	0.6828
Previous Monthly High	0.7662
Previous Monthly Low	0.7054
Daily Fibonacci 38.2%	0.6941
Daily Fibonacci 61.8%	0.6915
Daily Pivot Point S1	0.6901
Daily Pivot Point S2	0.6832
Daily Pivot Point S3	0.6791
Daily Pivot Point R1	0.7012
Daily Pivot Point R2	0.7053
Daily Pivot Point R3	0.7122

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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