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AUD/USD Technical Analysis has started to show early signs of recovery after buyers successfully defended an important support zone during the Asian session. Instead of extending lower, the pair produced a higher low on the 4-hour chart, suggesting that selling pressure may be losing momentum. While the broader trend is still neutral to slightly bearish, my short-term expectation favors a bullish retracement toward the next resistance area before the market decides its larger direction.
Buyers Are Defending Support
The latest price action tells an interesting story. Every attempt to push AUD/USD below the recent support has been absorbed by buyers, creating long lower wicks and stronger candle closes. From my own chart observation this morning, sellers looked aggressive at first, but they failed to keep price below support.
This usually indicates that liquidity below support has already been collected, allowing buyers to step back into the market. Rather than seeing immediate continuation to the downside, price now has room for a corrective move higher.
The 4-hour structure also shows a sequence of higher lows developing after the recent decline. That doesn't confirm a long-term bullish reversal yet, but it often signals that a relief rally is beginning.
Momentum Indicators Support a Recovery
Technical indicators are gradually shifting in favor of buyers. RSI has started moving back toward the 50 level after spending several sessions in bearish territory. At the same time, MACD histogram bars are becoming smaller, suggesting bearish momentum is fading.
The pair is also attempting to reclaim its short-term moving averages. If buyers manage to secure another strong 4-hour candle above the current range, momentum could accelerate toward the next resistance zone.
During the London session, I noticed buyers repeatedly stepping into every minor dip instead of allowing fresh breakdowns. That behavior often appears before a recovery move rather than another impulsive sell-off.
Key Technical Levels
Immediate Support: 0.6965
Intraday Buy Zone: 0.6970 – 0.6980
First Upside Target: 0.7000
Main Resistance Zone: 0.7020 – 0.7040
As long as price remains above 0.6965, buyers maintain the short-term advantage. A sustained move above 0.7000 could increase the probability of testing the major resistance area between 0.7020 and 0.7040.
The previous AUD/USD bullish outlook discussed how strong support could trigger a technical rebound, and current price action continues to respect that scenario.
Dollar Strength May Slow the Rally
Although the U.S. dollar remains relatively firm, AUD/USD has shown resilience by refusing to make fresh lows. This divergence suggests buyers are becoming more active near support.
According to Investing.com's AUD/USD market page, traders continue monitoring incoming economic data that could influence both the Australian dollar and the U.S. dollar during the New York session.
That means volatility could increase, but unless support breaks decisively, the technical picture continues to favor a move toward resistance instead of an immediate bearish continuation.
Can Buyers Reach Resistance?
At this stage, I believe the probability favors a continued recovery rather than an immediate bearish breakdown. Price has respected support multiple times, and each rejection has attracted fresh buying interest. Unless an unexpected fundamental catalyst changes sentiment, the current structure supports another attempt toward resistance.
One important factor is market psychology. After several days of selling, many retail traders continue looking only for short opportunities. However, institutional traders often buy after liquidity has been collected below support. That difference in positioning frequently creates short-covering rallies before the primary trend resumes.
Another reason supporting the bullish scenario is the improving risk sentiment across the currency market. If buyers maintain control during the New York session, AUD/USD could extend toward the 0.7020–0.7040 resistance zone without requiring a complete trend reversal.
For traders following broader dollar sentiment, the earlier EUR/USD and DXY outlook also explains how temporary dollar weakness often supports short-term recoveries across major currency pairs.
Trading Outlook
I am not looking for aggressive long-term buying here. Instead, I see this as a technical recovery trade while support remains intact. As long as AUD/USD continues holding above 0.6965, buyers may have enough momentum to revisit the 0.7020–0.7040 resistance area.
A confirmed breakout above that resistance would strengthen the bullish case even further. However, if price fails there, traders should watch carefully for fresh selling pressure and possible rejection signals.
Directional Bias
My short-term bias is bullish. I expect AUD/USD to remain supported above 0.6965 and gradually move toward the 0.7020–0.7040 resistance zone. Until support breaks with strong volume, I prefer buying pullbacks instead of chasing new sell positions.
This analysis is provided for educational and informational purposes only and should not be considered financial or investment advice. Forex trading involves substantial risk, and market conditions can change rapidly. Always perform your own technical and fundamental analysis, manage risk carefully, and never risk more capital than you can afford to lose.
