AUD/USD traded lower yesterday, after it hit resistance near the 0.7007 territory. However, the slide was short-lived. The rate hit support near 0.6962, and today, it rebounded somewhat. On May 24th, the rate emerged above the prior downtrend line drawn from the high of April 17th, while this Monday, it broke above the 0.6937 hurdle, completing a short-term trend reversal to the upside. Therefore, we see a positive near-term picture for now.
If the bulls are strong enough to take the reins from near the 0.6962 zone, then we may see them aiming for another test near the 0.7007 level. A clear move above that hurdle would confirm a forthcoming higher high on the 4-hour chart and may initially pave the way towards the 0.7027 barrier, marked by the high of May 8th. If that level fails to stop the rate from drifting further north, then its break may allow the bulls to put the 0.7050 area on their radars. That zone acted as a strong resistance on May 7th.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near the crossroads of its 50 barrier and its respective upside support line, while the MACD, although below its trigger line, shows signs that it could start bottoming in the positive territory. These indicators suggest that the rate may have started picking up positive momentum again, and enhance our view for some further short-term advances.
In order to abandon the bullish case, we would like to see a clear dip back below the 0.6925 obstacle. This would also drive the rate below the upside support line drawn from the low of May 23rd and might trigger declines towards the 0.6900 territory, which provided decent support on May 30th and 31st. If that zone proves to be no obstacle for the bears, the slide could be extended towards the 0.6865 zone, which held the price from drifting lower between May 17th and 23rd.
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