The AUD/USD currency pair shows signs of improvement as it bounces back from a three-week low, reaching 0.6630 ahead of the European session. Despite remaining within a descending trend channel that has been in place for the past two weeks, the Australian dollar welcomes the retreat of the US dollar.
The bearish chart pattern and the pair’s consistent trading below the 200-SMA provide encouragement for sellers. However, the recent bullish signals from the MACD and the rebound of the RSI (14) from oversold levels offer hope for further recovery of the AUD/USD pair.
Although the upside potential is limited as long as the pair stays below the upper boundary of the mentioned channel, which currently stands near 0.6650, it is worth noting that crossing the 0.6650 obstacle could be a significant milestone. Nevertheless, the bulls may encounter resistance at the 200-SMA level of 0.6685 and the psychological level of 0.6700 before gaining control.
In addition, it is important to highlight that the weekly high of 0.6720 acts as a final defensive line for the AUD/USD bears.
On the downside, the short-term decline of the AUD/USD is constrained by an ascending trend line starting from Wednesday, which is positioned around the psychological level of 0.6600.
Subsequently, the lower boundary of the bearish channel and the 78.6% Fibonacci retracement level, ranging from the late May to mid-June upswing, near the vicinity of 0.6560-55, become crucial reference points for further guidance.
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