AUDUSD holds onto its bounce off a downward sloping support line from late January, as well as the 61.8% Fibonacci Expansion (FE) of April-June moves as traders await the Reserve Bank of Australia’s (RBA) third rate hike. Nearly oversold RSI also hints at the quote’s further recovery, in addition to the hawkish hopes from the Aussie central bank. The upside momentum, however, remains elusive unless crossing the late January swing low surrounding 0.6965-70. Also likely to challenge the pair buyers is the 50-day EMA level of 0.7050 and the 200-day EMA close to 0.7210. In a case where the quote rallied beyond 0.7210, the odds of its run-up beyond June’s top of 0.7282 can’t be ruled out.
On the contrary, the 61.8% FE level, near 0.6770, precedes the aforementioned support line from January, around 0.6750, to limit the short-term downside of the AUDUSD pair. Should the pair stays on the back foot below 0.6750, the March 2020 high near 0.6680 will act as the last defense for the pair buyers, a break of which won’t hesitate to drag the prices towards the April 2020 peak of 0.6569.
Overall, AUDUSD is likely to witness a corrective pullback and the RBA’s rate hike could serve the purpose. However, the Fed Minutes and US NFP may keep sellers hopeful and hence the pair buyers need to remain cautious.