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AUDUSD Technical Analysis-Bulls holds above the 0.6685 level

The AUDUSD was up +0.52% early Tuesday morning following a hawkish tone from the Reserve Bank of Australia meeting minutes. The minutes indicated that the RBA considered a rate hike in April before deciding to pause. The central bank shifted its forward guidance to inflation data, jobs, consumer spending and business conditions. Regarding inflation, Australia's CPI dropped to 6.8% vs 7.4% previously. The inflation is still relatively high and the prospects of further hikes could lift the Aussie in the near term.

Moreso, the upbeat Chinese data acted as a tailwind for AUDUSD buyers early Tuesday. The Chinese GDP YoY rose to 4.5% against 4.0% surveyed, while Industrial Production came in at 3.9% vs 4.0% anticipated but better than a previous of 3.0%. The strength of the Chinese economy gave a lift for the AUD pairs and further upside movement could be expected in the near term.

However, the risk on sentiment could be short-lived if the Fed goes all in on rate hikes again. Gold is currently struggling to hold gains above the 2000 level as investors await a line-up of Fed speakers for a forward guidance on monetary policy.

Weekly Chart Analysis

The AUDUSD recovered gains for the second week as bulls find a near-term support above the 0.6600 psychological level. Upside gains are capped by the 0.6800 level, which coincides with a yearly opening price. A break above that level could reinforce a bullish rally and the next key target is the 0.71500 level. Bulls could seek opportunities above the 0.6700 level towards the 0.6800 level, and above the 0.6800 level, further movement could be expected.

However, if price fails to break above the 0.6800 level, price could reverse back to the 0.6600 low. A break below that level could invalidate the current bullish profile and price could seek the 0.61800 level, a 3-year low. Looking at the RSI, the indicator is currently trading below the 50.00 level suggesting a bearish weakness on the AUDUSD in the near-term. The pair is also trading in a premium level of the 0.71500-0.61800 range and sharp price spikes could be experienced in the near-term.

Daily Chart Analysis

The AUDUSD experienced an expansion to the upside after bouncing off the 0.6685 level, a weekly low. This could present good bullish trades towards the 0.68000 level and a break above that near-term barrier, bulls could expected extended targets towards the 0.6900 and 0.7000 psychological levels. The pair is currently sitting on the 200 and 50-day moving averages acting as near-term support level.

However, a failure to hold above the 0.6685 level, bears should short the market going for the 0.6500 and 0.61800 level, an October 2022 low. The 0.6800 remains a key level to gauge market sentiment and a failure to challenge this level by bulls could present bears with a swing trade back to the 0.6685 level.


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