- AUD / USD trimmed a portion of its intraday losses amid a modest USD pullback.
- The short-term technical bias remains firmly in favor of bearish traders.
- A sustained move beyond the 0.7765-75 region will negate the negative bias.
The pair AUD/USD it quickly rallied around 35 pips from daily lows and was last seen trading at modest losses, around the 0.7670 region.
The US dollar cut a portion of its intraday gains to three-and-a-half-month highs and extended some support to the AUD / USD pair. Apart from this, a sudden rally in US equity futures provided an additional boost to the perception of the aussie.
From a technical perspective, the pair once again attracted some buying ahead of the 38.2% Fibonacci level of the positive move 0.7027-0.8008. The mentioned support is pegged near the 0.7620 region and should now act as a key point for traders.
Given Friday’s sustained break below the 50-day SMA, the short-term bias could have turned in favor of bearish traders. The negative outlook is reinforced by the fact that the oscillators on the daily chart have just started to move into bearish territory.
Sustained weakness below 38.2% Fibonacci. Support will reaffirm the bearish bias and pave the way for an extension of the recent retracement slide from the key psychological 0.8000 level. The AUD / USD pair could become vulnerable to break below 0.7600.
The downward trajectory could then be extended to test the 100-day SMA support, currently near the 0.7545-40 region. The AUD / USD pair could eventually drop to 50% of the Fibonacci level around the 0.7500 psychological level.
On the other hand, the 50 DMA, coinciding with the daily swing highs, around the 0.7740-45 region, should now act as a strong resistance. This is closely followed by the 23.6% Fibonacci level / resistance level near the 0.7765-75 congestion zone.
A convincing advance will negate any negative short-term bias and trigger some short-hedging move. The subsequent positive move has the potential to lift the AUD / USD pair back above the 0.7800 mark, to test the 0.7830-40 supply zone.
Daily chart
Technical Levels
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