AUD/USD Price Analysis: Rejected at 0.6615, bullish indicator divergence intact

AUD/USD has backed off from session highs, possibly due to weak China data.
The bullish RSI divergence on the daily chart is still valid and suggests scope for a rise to resistance at 0.6774.

Omkar Godbole FXStreet Contributor

AUD/USD is currently trading near 0.6605, having clocked a session high of 0.6615 an hour ago.

Australia's economy grew by a better-than-expected 0.5% in the December quarter and 2.2% over the past year, the official data released at 00:30 GMT showed. Even so, the AUD has pulled back from session highs.

The bid tone may have weakened in response to the dismal China data released about 30 minutes ago. The Caixin/Markit services purchasing managers’ index (PMI) almost halved to just 26.5 in February from 51.8 in January. A reading below 50 indicates contraction.

However, despite the pullback from 0.6615, the bias remains bullish, as the positive divergence of the 14-day relative strength index confirmed by Tuesday's 0.74% gain is still valid. Only a break below the recent low of 0.6434 would invalidate the bullish divergence.

The pair, therefore, remains on track to test the resistance of the trendline falling from Jan. 2 and Jan. 16 highs. At press time, the trendline hurdle is located at 0.6652. A close higher would confirm a bullish reversal and will likely bring additional gains toward 0.6774 (Feb. 5 high).

Daily chart

Trend: Bullish

Technical levels

AUD/USD

Overview
Today last price	0.6605
Today Daily Change	-0.0002
Today Daily Change %	-0.03
Today daily open	0.6598

Trends
Daily SMA20	0.6651
Daily SMA50	0.6782
Daily SMA100	0.6813
Daily SMA200	0.6838

Levels
Previous Daily High	0.6646
Previous Daily Low	0.6509
Previous Weekly High	0.6628
Previous Weekly Low	0.6434
Previous Monthly High	0.6775
Previous Monthly Low	0.6434
Daily Fibonacci 38.2%	0.6594
Daily Fibonacci 61.8%	0.6561
Daily Pivot Point S1	0.6523
Daily Pivot Point S2	0.6447
Daily Pivot Point S3	0.6385
Daily Pivot Point R1	0.666
Daily Pivot Point R2	0.6721
Daily Pivot Point R3	0.6797

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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