Home AUD/USD Price Analysis: Eyes 0.7280, inverse cup-and-handle in play ahead of US data
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AUD/USD Price Analysis: Eyes 0.7280, inverse cup-and-handle in play ahead of US data

  • AUD/USD looks north ahead of the critical US ADP data.
  • A bunch of healthy support levels holds the upside.
  • US dollar remains underpinned by the upbeat ISM PMI.

AUD/USD is battling the 0.7300 barrier, down over 100-pips from 2020 highs of 0.7410 reached earlier this week.

The correction in the spot is mainly driven by the profit-taking rally in the US dollar across its main peers, after the greenback slumped to two-year lows on dovish Fed Chair Powell’s monetary policy stance.

Meanwhile, the renewed US-China tensions, in the face of the Trump administration announcement of the restrictions on the Chinese diplomates in America, also collaborates with the downside in the aussie.

While considering the technical view, the hourly chart paints a bearish picture for AUD/USD, as the price is on the verge of an inverse cup and handle pattern breakdown.

The spot briefly breached the critical horizontal (pattern) support at 0.7302 in the last hour, although an hourly closing below the latter is required to validate the bearish formation.

The hourly Relative Strength Index (RSI) inches lower, probing the oversold territory, currently trading at 30.20. This suggests that there is more scope to the downside.

Therefore, the sellers look to the bullish 200-hourly Simple Moving Average (HMA) at 0.7280 as the immediate support.

Any pullbacks will meet stiff resistance at the downward-sloping 21-HMA at 0.7322, above which the robust resistance at 0.7349 will be put to test. That level is confluence of the 50 and 100-HMAs.

AUD/USD: Hourly chart

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AUD/USD: Additional levels

 

 

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