AUD/USD has recovered nicely from the selloff in risk-on currencies on the back of the Fed meeting last week, but the pair is struggling to overcome bearish pressure at 0.7555. Powell's statement to Congress yesterday served to put a dent in the US dollar bullish reversal as his statement was taken as being dovish once again.
AUD/USD may see a short-term correction back towards the 'neckline' to the major top at 0.7588/7617.Look for a turn back lower in due course, with the next initial support seen at 0.7477/61, below which would complete a fresh intraday bearish continuation pattern to open up the 23.6% retracement of the entire upmove from 2020 at 0.7418 next. It's worth noting that there is a dearth of meaningful support below here, with the 'measured top objective' seen all the way down at 0.7085/43.
First short-term resistance stays at 0.7556/65. Above here would trigger a corrective move back higher, with the next level at 0.7588/92, then at most 0.7617/23, where we'd look for a cap.
Short-term momentum is turning bullish but sustainable gains are questionable at the moment. The 4-hour chart shows how the past advances have been corrected and taken back below 0.7555 so it will be key to see if today's push is able to hold above this area. If so, we may see increase resistance at 0.7570 before attempting to breach the 0.76 line, at which point bullish momentum is likely to build.
