- AUD/USD extends three-day recovery and climbs back above 200-DMA.
- Potential bear cross on the 1D chart keeps sellers hopeful.
- Daily closing above 200-DMA is needed for a bearish reversal in the near term.
AUD/USD jumps back on the bids above 0.7550, reversing the Asian losses, as the US dollar gives up its recovery mode amid Fed Chair Powell’s dovish comments.
Meanwhile, the aussie shrugs off the RBA Deputy Governor Luci Ellis’ dovish stance on monetary policy, as expectations of a sooner-than-expected Official Cash Rate (OCR) underpins the recovery momentum.
Additionally, a potential meeting between the US and China at the G20 Summit next week also bodes well for the Chinese proxy AUD.
From a near tern technical perspective, the aussie has finally recaptured the previous support now resistance at the 200-Daily Moving Average (DMA) of 0.7558.
The bulls, however, need a daily closing above the latter to unleash a meaningful recovery from six-month lows of 0.7477.
The next significant upside hurdle awaits at the 0.7600 threshold, beyond which the bearish 21-DMA at 0.7678 could be attempted.
AUD/USD: Daily chart
The Relative Strength Index (RSI) edges higher but remains below the central line, suggesting that the upside is likely to be limited.
Adding credence to limited bullish potential, the daily chart is on the verge of confirming a bear crossover, with the 50-DMA looking to cut the 100-DMA from above.
If the aussie fails to resist above the 200-DMA, then the downside could resume towards the 0.7500 round number.
The sellers will retest the multi-month troughs at 0.7477 should the selling pressure intensify.
