• AUD/USD pulled back from a three-and-half-week high touched earlier this Tuesday.
  • The risk-off impulse weighed on the risk-sensitive aussie amid resurgent USD demand.
  • A sustained break below 0.7100 is needed to support prospects for additional losses.

The AUD/USD pair witnessed a modest pullback from a three-and-half-week high, levels just above the 0.7200 mark touched earlier this Tuesday and eroded a major part of the overnight gains. The pair maintained its offered tone through the early North American session and dropped to a fresh daily low, closer to mid-0.7100s in the last hour.

The overnight hawkish comments by Fed Governor Christopher Waller, along with a sharp spike in the US Treasury bond yields, assisted the US dollar to stage a solid rebound from over a one-month low. Apart from this, the worsening global economic outlook and the risk-on impulse further boost the safe-haven greenback and exerted some downward pressure on the risk-sensitive aussie.

Despite the negative factors, the AUD/USD pair, so far, has managed to hold its neck above the 38.2% Fibonacci retracement level of the 0.7662-0.6829 downfall. This is followed by the 0.7130 confluence support, comprising the 200-period SMA on the 4-hour chart and the lower boundary of an ascending channel extending from the YTD low touched earlier this month.

Given that technical indicators on daily/4-hour charts are still holding in the positive territory, the set-up favours bullish traders and supports prospects for the emergence of some dip-buying. That said, a convincing breakthrough the aforementioned confluence support will negate the positive outlook and shift the bias in favour of bearish traders, prompting some technical selling.

Some follow-through selling below the 0.7100 mark will reaffirm the bearish bias and drag spot prices to the 23.6% Fibo. level support, near the 0.7025-0.7020 region. The next relevant support is pegged near the 0.7000 psychological mark, below which the AUD/USD pair could slide to the 0.6940 area en-route the 0.6900 mark and the 0.6830-0.6825 region, or the YTD low.

On the flip side, a sustained move beyond the 0.7200 round figure is likely to confront resistance near the 100-day SMA, around the 0.7235-0.7245 region. The said barrier coincides with the 50% Fibo. level and is closely followed by the 200-day SMA, near the 0.7260 zone, which if cleared would be seen as a fresh trigger for bullish traders and pave the way for further gains.

AUD/USD 4-hour chart

fxsoriginal

Key levels to watch

AUD/USD

Overview
Today last price 0.7157
Today Daily Change -0.0039
Today Daily Change % -0.54
Today daily open 0.7196
 
Trends
Daily SMA20 0.7049
Daily SMA50 0.7252
Daily SMA100 0.7232
Daily SMA200 0.7259
 
Levels
Previous Daily High 0.7201
Previous Daily Low 0.7166
Previous Weekly High 0.7167
Previous Weekly Low 0.7034
Previous Monthly High 0.7662
Previous Monthly Low 0.7054
Daily Fibonacci 38.2% 0.7188
Daily Fibonacci 61.8% 0.718
Daily Pivot Point S1 0.7175
Daily Pivot Point S2 0.7153
Daily Pivot Point S3 0.714
Daily Pivot Point R1 0.7209
Daily Pivot Point R2 0.7222
Daily Pivot Point R3 0.7244

 

 

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