AUDUSD Price Analysis: 38.2% Fibo level at 0.7000 offers stiff resistance

• AUDUSD fades the upside below the key Fibo 38.2% Fibo level.
• USD sell-off fails to impress amid covid lockdowns in Southern China.
• Daily RSI remains below 50.00, keeping the bearish bias intact.

AUDUSD is retreating from daily highs of 0.6988, as bulls take a breather after the latest leg higher. Investors assess the comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe, as well as, the June meeting minutes.

The extended rebound in the aussie comes on the heels of the ongoing sell-off in the US dollar across its major peers, as risk-on flows dominate the European session and dent the buck’s safe-haven appeal. Markets seem to be shrugging off the looming recession risks.

Bulls, however, sense caution amid fresh lockdowns in Shenzhen and Macau, as covid outbreaks spread to southern China. “A single local case in Shenzhen detected on Saturday triggered mass testing and neighborhood lockdowns in some parts of the technology hub. Two cases were eventually reported for Saturday, with none on Sunday,” per Bloomberg.

All eyes now remain on the US housing data and the prepared remarks of Fed Chair Jerome Powell’s testimony, which will be due on the cards later in the NA session.

From a short-term technical perspective, AUDUSD has stalled its upside, as bulls lost momentum once again below the critical 0.7000 level, which is the 38.2% Fibonacci Retracement (Fibo) level of the latest decline from the June 7 highs of 0.7247 to the June 14 lows of 0.6850.

That said, the aussie could ease further towards the 23.6% Fibo level of the same descent at 0.6944 should bears take over control.

Monday’s low of 0.6917 will be next on sellers’ radars. The 14-day Relative Strength Index (RSI) is trading flatlined but below the 50.00 level, suggesting that upside attempts are likely to remain shallow.

AUD/USD: Daily chart

Alternatively, if the price manages to find acceptance above the aforesaid critical resistance at 0.7000, then a fresh upswing towards 0.7050 cannot be ruled out. At that price zone, Friday’s high and 50% Fibo level coincide.

A sustained move above that barrier is needed to regain the upside traction towards the confluence of the 61.8% Fibo level and bearish 21-Daily Moving Average (DMA).

AUD/USD: Additional levels to consider