AUD/USD Price Analysis: Finds strong foothold above 21-DMA

• AUD/USD is consolidating the latest upswing below 0.7100.
• Optimism over Australian political change battles China’s covid woes, tech selling.
• The aussie recaptures 21-DMA, daily closing above it is critical.

AUD/USD is off three-week highs at 0.7096, although preserves a major portion of early gains led by a change in Australia’s political scenario.

The aussie breathed a sigh of relief, as the Australian Federal election resulted in a clear winner on Saturday, with the centre-left Labor Party close to winning a majority in parliament. The Labor Party ended a nearly 10-year rule of conservative government over the weekend.

However, concerns over higher global interest rates induced tech selling seeped into the Chinese markets as well, fuelling a sense of caution. Adding to this, Beijing reported record new cases, earlier on, reviving renewed lockdown concerns and tempering the risk-on market profile.

Looking ahead, the broader market sentiment will continue to drive the US dollar price action, which will also impact the AUD valuations.

Technically, AUD/USD has found a strong foothold above the bearish 21-Daily Moving Average (DMA) at 0.7044 after a down day seen on Friday.

Buying resurgence will take out the 0.7100 level, opening doors for a test of the May 6 highs of 0.7135.

The next stop for bulls is envisioned at the 0.7150 psychological barrier.

The 14-day Relative Strength Index (RSI) is inching higher to test the midline, justifying the ongoing upbeat momentum in the spot.

For the uptrend to extend, AUD bulls need a daily closing above the falling trendline resistance, which coincides with the 21-DMA.

AUD/USD: Daily chart

A failure to resist above the latter, bears will jump back into the game, dragging the aussie back towards Friday’s low of 0.7002.

Further down, powerful support awaits near 0.6950, which will be the line in the sand for AUD optimists.

AUD/USD: Additional levels to consider