- AUD/USD drops after facing rejection near Friday’s high of 0.7788.
- The aussie to find strong bids around 0.7720 region.
- RSI holds above the midline, keeping the buyers hopeful.
AUD/USD is battling the critical short-term 21-daily moving average (DMA) at 0.7762, as the sellers return amid a pause in the US dollar sell-off across the board.
The aussie fails to benefit from the rise in gold and silver prices, as markets turn risk-averse amid mixed Chinese activity numbers, which suggested an uneven economic recovery in the Australian top export destination.
At the time of writing, the aussie is trading around 0.7750, down 0.23% on the day, having faced rejection just shy of Friday’s high of 0.7788.
The AUD bulls need to take out the latter to resume its uptrend towards 0.7800. Acceptance above the round figure could call for a meaningful move higher.
The Relative Strength Index (RSI) is edging lower but remains above the midline, suggesting that the downside potential could be limited.
AUD/USD daily chart
Strong support awaits around the 0.7720 region, which is the confluence of the 100 and 50-DMAs.
Note that the price hasn’t given a daily closing below these two averages since May 4.
A breach of the latter could expose the 0.7700 psychological level. Further south, the May 4 low of 0.7675 could test the bearish commitments.
AUD/USD additional levels to watch
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