AUD/USD tecnical analysis: Nears key 1H resistance at 0.7054

• AUD/USD is currently probing the key hourly chart resistance at 0.7054. 
• A break higher would confirm a diamond pattern breakout and signal continuation of the recovery rally.

AUD/USD's corrective rally from recent lows below 0.70 would gather pace if the pair finds acceptance above 0.7054, confirming an upside break of the diamond pattern seen in the houly chart. A breakout, if confirmed, would open up upside towards 0.7080 – resistance as per the hourly chart. 

A breakout looks likely as the Chicago PMI – one of the leading indicators of the US economy – fell 6.1 points from March to 52.6 in April, the lowest level since January 2017, the data released on Tuesday showed. More importantly, the employment indicator softened to the lowest level since October 2017. As a result, traders may offer US dollar, pushing the AUD/USD higher.

The breakout, however, may remain elusive or could be short-lived if the spread between the Aussie and US 10-year government bond yields remains depressed near the multi-decade of -75 basis points hit last week. 

Hourly chart

Trend: Bullish

Pivot points