AUD/USD reclaims 0.7200 level, upside seems capped at 200-DMA

The AUD/USD pair's overnight recovery from its lowest level since early March gained traction and has now lifted the pair back above 0.7200 handle to currently trade a tad below 0.7220 level.

The pair on Tuesday extended its 200-day SMA break-down slide to 0.7145 before staging a minor recovery to 0.7184 level. On Wednesday, global risk-on sentiment seems to extend support to the commodities and eventually benefiting commodity-linked currencies like the Australian Dollar.

Meanwhile, data released earlier showed Australia's total construction fell further in Q1, for ninth quarter in the past ten quarters, by 2.6% as against consensus expectations of a fall of 1.5%. Disappointing construction output data further fueled speculations of an imminent RBA rate cut in the near-future and thus might cap any further recovery for the AUD/USD pair.

Technical levels to watch

On the immediate upside, move above 0.7225 is likely to get extended back towards 200-day SMA support turned resistance near 0.7250-55 region, above which the pair seems all set to climb back to test 0.7300-0.7310 resistance.

On the downside, 0.7200-0.7180 remains immediate support to defend. A convincing break below this immediate support now seems to pave way for extension of the pair's near-term downward trajectory towards 0.7100 round figure mark with some intermediate support near 0.7150-45 area.