AUD/USD Price Analysis: Bears flirt with 200-DMA support, around 0.7300 mark

• AUD/USD dropped to a fresh multi-week low, around the 200-day SMA on Friday.
• The technical setup supports prospects for a further near-term depreciating move.
• Sustained move beyond the 0.7400 mark is needed to negate the bearish outlook.

The AUD/USD pair witnessed heavy selling for the second successive day on Friday and tumbled to its lowest level since March 17 during the mid-European session. The pair was last seen trading flirting with the very important 200-day SMA, around the 0.7300 round-figure mark.

The overnight sustained break below the 0.7355-0.7350 confluence, comprising an ascending trend-line extending from the YTD low and the 50-day SMA, was seen as a key trigger for bearish traders. Moreover, technical indicators on the daily chart have just started drifting into negative territory and support prospects for further losses.

Acceptance below a technically significant moving average will reaffirm the bearish outlook and prompt fresh selling, paving the way for a slide towards the 0.7250 region. The AUD/USD pair could extend the downward trajectory and drop below the 0.7200 mark, towards testing the next relevant support near the 0.7175-0.7165 region.

On the flip side, the 0.7350-0.7355 confluence support breakpoint should now cap any attempted bounce. Subsequent move up is more likely to attract fresh selling and fizzle out near the 0.7400 mark. The latter should act as a pivotal point for short-term traders, which if cleared decisively could trigger a short-covering rally.

The AUD/USD pair could then accelerate the momentum towards the weekly high, around the 0.7455-0.7460 region. The upward trajectory could further get extended and allow bulls to aim back to reclaim the 0.7500 psychological mark.

AUD/USD daily chart

Key levels to watch