AUD/USD recovers modestly, remains under 0.7200
- AUD/USD rebounds from 27-months lows but recovery limited below 0.7200.
- Positive market sentiment and a correction of the US dollar helped the Aussie.
The AUD/USD pair rebound from multi-month lows and rose further during the American session but slowly. It peaked at 0.7197 and during the last hours, it has been hovering around 0.7185/90, consolidating slightly above the level it had exactly a day ago.
The move higher from 0.7143 took place amid a recovery in equity prices in Wall Street, a correction of the US dollar and higher commodity prices. If the positive sentiment toward risk continues it could add support to the pair. During Thursday’s Asian session, Australia will release the July Trade Balance with analysts looking particularly for the trade numbers with China that could influence on the Aussie.
AUD/USD Technical outlook
“Despite advancing, the pair has posted a lower low and a lower high daily basis, indicating that bears are still in control of the pair. In the shorter term, and according to the 4 hours chart, the upside seems limited, as the pair is unable to break above a bearish 20 SMA, currently hovering around it, while the Momentum indicator retreats modestly from its 100 level and the RSI hovers around 44,” says Valeria Bednarik, Chief Analyst at FXStreet.
According to her, AUD/USD still looks vulnerable and a break below 0.7150, could add more bearish pressure.