AUD/USD Price Analysis: Seems vulnerable amid a potential bear flag on daily chart

AUD/USD off lows around 0.7350, but not out of the woods yet.
Bears are testing the bullish commitments at critical daily support.
Escalating covid concerns remain a drop, with all eyes on the RBA decision.

Dhwani Mehta FXStreet

AUD/USD has bounced back above 0.7350, tracking the rally in the S&P 500 futures amid a recovery in the risk appetite.

Expectations of more monetary stimulus support likely from China combined with the progress on the US infrastructure bill boost the market mood, weighing negatively on the safe-haven US dollar.

Despite the rebound in the aussie, its bearish potential appears intact amid surging covid cases in Australia and extension of the lockdowns across the country. Traders also remain on the back foot ahead of the US ISM Manufacturing PMI and Reserve Bank of Australia’s (RBA) monetary policy decision.

As observed on AUD/USD’s daily chart, the aussie is testing the critical rising trendline support at 0.7330.

A daily closing below the latter could validate a bear flag formation, with a sell-off towards 0.7200 likely on the cards. Ahead of that the spot could test the 0.7300 level.

The 14-day Relative Strength Index (RSI) remains below the midline, allowing room for more declines.

AUD/USD: Daily chart

Meanwhile, any recovery attempts could face stiff resistance around 0.7420, where the bearish 21-Daily Moving Average (DMA) and rising trendline hurdle intersect.

A sustained break above the latter could negate the bearish momentum in the near term.

AUD/USD: Additional levels to consider

AUD/USD

Overview
Today last price	0.7352
Today Daily Change	0.0007
Today Daily Change %	0.10
Today daily open	0.7345

Trends
Daily SMA20	0.7415
Daily SMA50	0.7556
Daily SMA100	0.7635
Daily SMA200	0.7599

Levels
Previous Daily High	0.7405
Previous Daily Low	0.733
Previous Weekly High	0.7415
Previous Weekly Low	0.7317
Previous Monthly High	0.7599
Previous Monthly Low	0.7288
Daily Fibonacci 38.2%	0.7359
Daily Fibonacci 61.8%	0.7376
Daily Pivot Point S1	0.7315
Daily Pivot Point S2	0.7285
Daily Pivot Point S3	0.724
Daily Pivot Point R1	0.739
Daily Pivot Point R2	0.7435
Daily Pivot Point R3	0.7465

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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