AUD/USD Price Analysis: Not out of the woods yet, focus on daily close
27.01.2022, 09:41

AUD/USD Price Analysis: Not out of the woods yet, focus on daily close

  • AUD/USD rebounds from monthly lows but downside risks persist.
  • The US dollar hovers near one-month top, risk sentiment recovers slightly.
  • The aussie eyes daily closing below 0.7088 to extend the downtrend.

AUD/USD has staged a quick rebound from monthly lows of 0.7062 but remains below the 0.7100 barrier.

The US dollar holds onto the post-Fed gains, despite a minor recovery in the risk sentiment, reflective of a bounce in the S&P 500 futures. The futures tied to the S&P 500 index reverse most losses to now trade flat at 4,350.

There is no encouraging news for the risk rebound, although it could mean that investors are adjusting positions ahead of the US Q4 advance GDP release and tech earnings reports.

Technically, AUD/USD is at a make-or-break point, as of writing, trading around the critical daily horizontal support line, aligned at 0.7088.

Bears need a daily closing below the latter to confirm a downside break and fuel a fresh downswing towards the 0.7050 psychological level.  

AUD/USD: Daily chart

The next stop for aussie sellers is seen at the December 7 lows of 0.7038, below which the 0.7000 round number comes into play.

The 14-day Relative Strength Index (RSI) looks south below the midline, justifying the bearish outlook.

Alternatively, any recovery will need validation at 0.7100, above which a rally towards the bearish 50-Daily Moving Average (DMA) at 0.7177 cannot be ruled out.

AUD/USD: Additional levels to consider

 

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