Falls to lows of more than a month, levels below 0.7600

• The moderate RBA surprise triggered further selling around AUD / USD on Tuesday.
• A sudden spike in demand for USD further contributed to the intraday decline.
• A sustained break below the 0.7570-65 region will set the stage for a further decline.

The pair AUD/USD extended the post-RBA retracement decline from the 0.7660 area and fell to its lowest level since late December during the mid-European session.

A good recovery in US Treasury yields helped reignite demand for US dollars, which, in turn, was seen as a key factor dragging the pair down. The bears are now looking to extend the slide further below 0.7600, which represents the 61.8% Fibonacci level of the strong upward move of 0.7522-0.7820.

Meanwhile, technical indicators on 4 hours / day charts have been gaining negative traction and support the prospects for further weakness. With that said, any subsequent decline is likely to find decent support near a four-week downtrend line, currently around the 0.7570-65 region.

Some follow-up selling will be seen as a new trigger for bearish traders and will set the stage for an extension of the recent corrective decline from multi-year highs. The AUD / USD pair could accelerate the downward trajectory and aim to challenge the key psychological mark of 0.7500.

On the other hand, the 0.7655-60 region now appears to have emerged as strong immediate resistance. A sustained move beyond the aforementioned barrier is needed to nullify any short-term bearish bias. This, in turn, could push the AUD / USD pair through 0.7700, towards the 0.7750 resistance.

4 hour chart

Technical levels