AUD/USD technical analysis: Bounces off multi-month lows, tests 1-week old descending channel resistance

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  • The AUD/USD pair traded with a bearish bias for the fifth consecutive session on Tuesday, albeit has managed to trim a part of its early slide to 5-1/2 month lows.
  • Dovish RBA monetary policy meeting minutes, showing that further monetary easing was more likely in the coming month further added to the recent bearish pressure.

However, oversold conditions on hourly charts prompted some near-term short-covering move and assisted the pair to bounce back closer to the top end of a descending trend-channel, held over the past one week or so.

Sustained move beyond the mentioned barrier might continue to fuel the recovery move and lift the pair back towards the previous multi-month lows support breakpoint, now turned resistance near the 0.6860-65 region.

Meanwhile, fears about a further escalation in the US-China trade tensions might continue to weigh on the China-proxy Australian Dollar and keep a lid on any strong follow-through recovery ahead of the FOMC on Wednesday

With oscillators on the daily chart still far from being in the oversold territory, rejection from the immediate resistance might turn the pair vulnerable to slide further towards challenging the 0.6800 handle – trend-channel support.

AUD/USD 1-hourly chart

 

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