AUD/USD technical analysis: Set-up favours bullish traders, move beyond 0.70 handle awaited

   •  The AUD/USD pair built on its recent bounce and climbed to three-month tops on Tuesday, showing little reaction to the RBA’s decision to cut rates to a historic low level of 1.25%.

   •  However, the intraday positive move struggled to find acceptance above 200-period SMA on the 4-hourly chart and stalled near 38.2% Fibo. level of the 0.7207-0.6862 recent downfall.

Given the overnight bullish break through the 0.6935-40 supply zone - marking the top end of a broader trading range held over the past two weeks or so, and a subsequent move beyond 23.6% Fibo. level the setup support prospects for an extension of the positive momentum. 

Technical indicators on hourly charts maintained their bullish bias and have also started gaining positive traction on the daily chart, adding credence to the constructive outlook. Meanwhile, bulls are likely to wait for a sustained break through the key 0.70 psychological mark before positioning for any further appreciating move.

Beyond the mentioned barrier, the pair is likely to aim towards testing 50% and 61.8% Fibo. retracement level resistance near the 0.7035 level and the 0.7075 region respectively.

AUD/USD 4-hourly chart