Buyers of the Australian dollar responded positively to the results of the RBA's May meeting, leading to a sharp appreciation of the Australian dollar. Meanwhile, the AUD/USD pair resumed its upward momentum at the beginning of this month, although we are currently considering it as a correction.
To break into the medium-term bullish market zone, the price needs to consolidate above the key resistance levels 0.6790 (200 EMA on the daily chart) and 0.6815 (50 EMA on the weekly chart).
As of writing, AUD/USD has just reached the 0.6790 resistance level. In general, below the key resistance levels 0.7040 (144 EMA on the weekly chart and the 38.2% Fibonacci retracement level of the decline wave from 0.9500 in July 2014 to multi-year lows and the level of 0.5500 reached in March 2020) and 0.7100 (200 EMA on the weekly chart), AUD/USD is in the long-term bearish market zone.
Therefore, a break of the support at 0.6760 could signal the resumption of short positions and the return of AUD/USD to the downward channel on the daily chart with targets at the support levels of 0.6715 (50 EMA on the daily chart), 0.6635, 0.6570, and 0.6500 (the lower line of this downward channel).
In an alternative scenario, a confirmed breakout of the resistance level at 0.6815 could signal buyers of the pair and trigger further growth of AUD/USD towards the resistance levels 0.6920, 0.7040, and 0.7100. Breaking the 0.7100 level would move the pair into the long-term bullish market zone.
Support levels: 0.6760, 0.6715, 0.6700, 0.6690, 0.6635, 0.6570, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170
Resistance levels: 0.6790, 0.6800, 0.6815, 0.6900, 0.6920, 0.7000, 0.7040, 0.7100
