AUD/USD Price Analysis: Oversold conditions, risk-on mood fuel a rebound towards 0.7200

• AUD/USD bounces off a dip to near yearly lows of 0.7105.
• Aussie re-opening optimism and risk-on mood underpin the aussie.
• 23.6% Fibo level to challenge the road to recovery for AUD bulls.

AUD/USD is attempting a bounce from three-week lows of 0.7105, as it looks to recapture the 0.7200 round number.

The aussie benefits from the risk-on market mood-driven broad US dollar weakness. Further, the Australian re-opening optimism outweighs the Delta covid variant concerns, especially after the country’s PM Scott Morrison called on the state leaders to stick to their plan to re-open.

As observed on the pair’s daily chart, the bulls are attempting a bounce in the Asian trades this Monday, looking to take out the immediate resistance at 0.7172, which is the 23.6% Fibonacci Retracement level of the sell-off from the August 13 peak to the yearly lows reached last Friday.

 Recapturing the latter is critical to extending the recovery momentum towards 0.7200.

The 14-day Relative Strength Index (RSI) is also rebounding from the oversold region, backing the corrective pullback.

AUD/USD: Daily chart

Alternatively, if the bulls fail to defend the intraday low at 0.7119, then a test of the multi-month lows of 0.7105 would be inevitable.

Further south, sellers could then aim for the 0.7050 psychological barrier.

AUD/USD: Additional levels to consider