AUD/USD Price Analysis: Resumes upside journey as USD Index drops further ahead of US Inflation

The AUD/USD pair has resumed its upside journey after a corrective move to near 0.6750 in the Tokyo session. A solid recovery in the Aussie asset is being supported by a further correction in the US Dollar Index (DXY). The USD Index has refreshed its day’s low at 101.54 as a delay in US debt ceiling issues is impacting the long-term outlook of the United States economy.

Meanwhile, headlines that US Trade Chief Tai will meet Chinese commerce minister Wang Wentao in Detroit later in May is expected to keep the Australian Dollar active. Positive developments in the meeting would bring prosperity to their trade relations. It is worth noting that Australia is the leading trading partner of China and healthy trade relations in Sino-US will also improve opportunities for Australia.

AUD/USD is oscillating broadly in Wyckoff’s Accumulation phase in which inventory is shifted from retail participants to institutional investors. A breakout of the same results in wider bullish ticks and heavy volume.

The 10-period Exponential Moving Average (EMA) at 0.6721 is providing support to the Australian Dollar bulls.

Also, the Relative Strength Index (RSI) (14) is making efforts for climbing into the 60.00-80.00 range as it would trigger the upside momentum.

An acceptance above the round-level resistance at 0.6800 confidently, Australian Dollar bulls will firmly drive the asset higher toward February 06 low at 0.6855 followed by February 21 high at 0.6920.

In an alternate scenario, US Dollar bulls will flex their muscles if the Aussie asset will drop below March 15 low at 0.6590. An occurrence of the same will expose the asset to March 08 low at 0.6568 followed by 02 November 2022 high around 0.6500.

AUD/USD daily chart