AUDUSD has been on a recovery mode this week, slowly erasing the slump to an eight-month low of 0.7476, which shot the price out of the 0.7531 – 0.8006 range area and put the market in a soft downward path.
The pair is currently aiming to extend its positive momentum above the 200-day simple moving average (SMA), with the RSI and the Stochastics backing the bullish attempt as the indicators are sloping upwards again after hitting a bottom in the oversold area. The MACD has also stabilized in the negative area, reflecting the growing presence of buying pressures.
That said, the 0.7600 level, which has been a former support area, appeared a tough barrier to overcome on Wednesday. This is also where the restrictive red Tenkan-sen line is converging, making any upside correction above that bar demanding.
Nevertheless, should the bulls claim the 0.7600 handle, they may also need to breach the 0.7645 barrier and the 20-day SMA in order to meet the key 0.7770 – 0.7815 key resistance territory. Beyond the latter, a decisive close above 0.7890 could underpin buying confidence towards the ceiling of the range at 0.7965 – 0.8006.
Alternatively, if sellers press the price back below the 0.7531 mark, the previous low of 0.7476 could see another test. Failure to hold here may generate additional losses towards the 0.7400 number, while lower the area around 0.7338 could establish the next pivot point.
Summarizing, although some improvement in market sentiment is evident in AUDUSD this week, questions remain about whether bullish pressures can endure above 0.7600.
