The AUD/USD pair regains some positive traction during the Asian session on Tuesday and reverses a part of the previous day's losses, though lacks bullish conviction. The global risk sentiment remains well supported by the latest optimism over the easing of COVID-19 curbs in China.This, in turn, is seen as a key factor undermining the safe-haven US Dollar and lending support to the risk-sensitive Australian Dollar. That said, the uncertainty over the Fed's rate-hike path should hold back traders from placing aggressive bearish bets around the greenback.

From a technical perspective, any subsequent move up is likely to confront some resistance near the 0.6800 mark. Some follow-through buying could allow bulls to retest the multi-month top, around the mid-0.6800s touched last week. The latter should act as a pivotal point, which if cleared decisively should pave the way for a further near-term appreciating move. The AUD/USD pair might then accelerate the momentum towards the 0.6900 mark en route to the September monthly top around the 0.6915 area. Some follow-through buying has the potential to lift spot prices to the 0.7000 psychological mark.

On the flip side, the overnight swing low, around the 0.6730-0.6725 zone, should protect the immediate downside. The said area marks confluence support comprising the 100-period SMA on the 4-hour chart and a multi-week-old ascending trend line. A convincing break below will negate any near-term positive outlook. Some follow-through selling below the 0.6700 mark will shift the bias in favour of bearish traders and make the AUD/USD pair vulnerable to testing the 0.6600 mark, with some intermediate support near the 0.6640-0.6635 region. The downward trajectory could get extended further and expose a strong horizontal resistance breakpoint, around the 0.6500 psychological mark.

Selling AUDUSD Below the Daily TL

Dec 13 2022