AUD/USD Technical: Short-term Potential Bullish Revival

Republished By Plato

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Cleared above 200-day moving average ex-post US CPI.
Short-term uptrend but the medium-term trend is still sideways as it remained below a major descending trendline resistance at 0.6930.
Short-term momentum, hourly RSI has turned bullish.

This is a follow-up analysis of our prior report, “AUD/USD Technical: Bulls rejected at 20 and 200-day moving averages ahead of US CPI” published on 12 July 2023. Click here for a recap.

Above the 200-day moving average but still below a major descending trendline resistance

Fig 1: AUD/USD medium-term trend as of 18 Jul 2023 (Source: TradingView, click to enlarge chart)

The AUD/USD has staged the bullish breakout above the 200-day moving average ex-post US CPI data release, rallied by 190 pips from the breakout point triggered last Wednesday, 12 July to last Friday, 14 July intraday high of 0.6895.

Overall, the bigger picture major trend of the AUD/USD is still considered sideways as its current rally above the 200-day moving average is still capped by a major descending trendline in place since the 21 February 2021 high now acting as resistance at 0.6930 (see daily chart).

Short-term minor uptrend intact

Fig 2: AUD/USD minor short-term trend as of 18 Jul 2023 (Source: TradingView, click to enlarge chart)

The AUD/USD has started to pull back from last Friday, 14 July high, and shed -107 pips to print an intraday low of 0.6787 yesterday, 17 July early US session.

Current key elements now suggest that the price actions of AUD/USD may resume the impulsive up move of its ongoing short-term minor uptrend in place since the 29 June 2023 low of 0.6595.

Today’s price actions have formed a “higher low” right after a retest on its former minor ascending channel resistance now turns intermediate pull-back support at around 0.6800 (see 1-hour chart).

Prior to the formation of the “higher low” in price actions, the hourly RSI has formed a bullish divergence signal near its oversold region which indicates that the downside momentum of the slide in price actions seen from last Friday, 14 July to yesterday, 17 July has waned.

Watch the 0.6760 key short-term pivotal support with the next resistances coming in at 0.6890 and 0.6930.

On the other hand, a break below 0.6760 negates the bullish tone to expose the next support at 0.6700 (also the 200-day moving average).

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Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities. Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets. In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.