• AUDUSD staged a goodish bounce from a two-year low and snapped a two-day losing streak.
  • Recession fears, Fed rate hike bets should underpin the USD and cap the risk-sensitive aussie.
  • A three-week-old descending channel also points to a well-established short-term downtrend.

The AUDUSD pair once again showed resilience near the 0.6765-0.6760 area and staged a goodish bounce from over a two-year low set earlier this week. Spot prices extended the steady intraday ascent through the early part of the European session and climbed to the 0.6830-0.6835 area, reversing weekly losses.

Upbeat Australian trade balance data, along with recovery in iron ore prices, offered some support to the resources-linked aussie. Adding to this, a slight improvement in the risk sentiment prompted some profit-taking around the safe-haven US dollar and benefitted the risk-sensitive Australian dollar.

That said, growing fears about a possible global recession should keep a lid on any optimistic move in the markets. Apart from this, the prospects for more aggressive Fed rate hikes should act as a tailwind for the greenback and further contribute to capping the AUDUSD pair, at least for the time being.

From a technical perspective, the recent downfall since mid-June along a downward sloping trend channel points to a well-established short-term bearish trend. Hence, any subsequent move up is more likely to meet with a fresh supply near the top end of the said channel, currently around the 0.6865 area.

This is closely followed by the 0.6900 mark, which coincides with the 100-period SMA on the 4-hour chart. Some follow-through buying would suggest that the AUDUSD pair has formed a bottom and will trigger an aggressive short-covering move, which should lift spot prices towards the 0.6955-0.6960 supply zone.

On the flip side, the 0.6800 round figure now seems to protect the immediate downside ahead of the 0.6765-0.6760 area. Failure to defend the said support levels would make the AUDUSD pair vulnerable to slide further, towards challenging the ascending channel support, currently around the 0.6715-0.6710 area.

A convincing breakthrough the latter, leading to a subsequent fall below the 0.6700 mark would be seen as a fresh trigger for bearish traders and pave the way for additional losses. The AUDUSD pair might then accelerate the fall towards the next relevant support near the 0.6655-0.6650 region.

AUD/USD 4-hour chart

fxsoriginal

Key levels to watch

AUD/USD

Overview
Today last price 0.6827
Today Daily Change 0.0048
Today Daily Change % 0.71
Today daily open 0.6779
 
Trends
Daily SMA20 0.6926
Daily SMA50 0.7023
Daily SMA100 0.7189
Daily SMA200 0.7217
 
Levels
Previous Daily High 0.6827
Previous Daily Low 0.6761
Previous Weekly High 0.6965
Previous Weekly Low 0.6764
Previous Monthly High 0.7283
Previous Monthly Low 0.685
Daily Fibonacci 38.2% 0.6786
Daily Fibonacci 61.8% 0.6802
Daily Pivot Point S1 0.6751
Daily Pivot Point S2 0.6723
Daily Pivot Point S3 0.6685
Daily Pivot Point R1 0.6817
Daily Pivot Point R2 0.6855
Daily Pivot Point R3 0.6883

 

 

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