AUD/USD Price Analysis: Stays defensive but a falling wedge, targets a rally toward 0.7000
- The AUD/USD is bearish biased, but US dollar weakness pushed the major price upwards.
- Investor’s flight toward safe-haven did little to boost the greenback on Tuesday, as it fell.
- AUD/USD Price Analysis: The daily chart illustrates a falling wedge emerging, which targets a rally towards 0.7000.
The AUD/USD rose from YTD lows around 0.6714 on Tuesday, amidst a fragile market mood that shifted sour as the Wall Street close approached, a reflection of US recession worries as traders feared the Federal Reserve tightening cycle might tip the US economy into a recession.
The AUD/USD is trading at 0.6759 at the time of writing after hitting a daily high around 0.6779, bolstered by a weaker US dollar, and despite China’s covid-19 resurgence, particularly in Shanghai, as authorities ordered massive testings across the city.
AUD/USD Daily chart
The AUD/USD stays heavy, albeit recovering some ground during the day. But sellers remain in control due to some factors: the daily moving averages (DMAs) reside above the exchange rate, oscillators are in bearish territory, and AUD buyers’ failure to reclaim the 0.7000 figure opened the door for further selling pressure. Therefore, the AUD/USD path of least resistance is downwards.
The AUD/USD first demand area would be the YTD low, around 0.6714. Break below will expose the figure at 0.6700, followed by a dip toward May 22, 2020, swing low at 0.6505.
Nevertheless, there is a ray of hope for AUD buyers. The AUD/USD formed a falling wedge in a downtrend, meaning a break above the top trendline might open the door for further gains. Hence, the AUD/USD first resistance would be the ti trendline around 0.6830. A breach of the latter will expose the 20-day EMA around 0.6884, followed by the 100-day EMA shy of the 0.7000 area, near 0.6997.
AUD/USD Key Technical Levels