AUD/USD swings higher to 0.7380 on Aussie tax cuts hopes

• Lifted by Australia’s proposed tax cuts and risk-on rally in the Asian equities.
• Bulls need a break above the 5-DMA resistance at 0.7398 for a sustained recovery.
• Eyes on Aussie tax cuts approval and US macro news for further momentum.

The AUD/USD pair staged a sharp V-shaped reversal last hour, bouncing-off two-day lows of 0.7356 in a bid to take-out the 0.7398/40 resistances amid risk-on market profile and expectations of the Australian tax cuts.

AUD/USD: A Doji on daily sticks

The Aussie paused its five-day losing streak and rebounded this Thursday, now forming a Doji candle on the daily sticks, which suggests indecision heading into the Australian parliament’s approval of the proposed tax cuts in the Budget this year.

However, the sentiment around the spot remains supported by the risk-on rally in the Asian equities, especially with the Australian ASX 200 index rallying +1.20%. More so, the USD bulls continue to run into resistance near 95.20 levels, adding to the positive tone around the Aussie.

All eyes remain on the Aussie tax cuts approval for fresh direction on the pair ahead of the US datasets due later in the NA session.

AUD/USD Technical Levels

Resistance 1: 0.7382 (daily pivot), Resistance 2: 0.7398/0.7400 (5-DMA/ round number), Resistance 3 0.7468 (10-DMA).   

Support1: 0.7347 (2018 lows), Support2: 0.7312 (classic S3), Support 3: 0.7250 (psychological levels).