AUD/USD Price Analysis: Bulls look to build on momentum beyond 0.6900 ahead of US CPI

• AUD/USD reverses modest intraday downtick and hits a nearly two-week high on Tuesday.
• The prevalent selling bias surrounding the USD remains supportive of the intraday uptick.
• A breakout through the 0.6865-0.6860 confluence supports prospects for additional gains.

The AUD/USD pair attracts some dip-buying near the 0.6860 area on Tuesday and turns positive for the third straight day. The pair is currently placed near a two-week high, with bulls awaiting a sustained move beyond the 0.6900 round-figure mark.

The US dollar selling remains unabated through the first half of the European session and turns out to be a key factor acting as a tailwind for the AUD/USD pair. The uptick, however, lacks follow-through buying as investors keenly await the crucial US consumer inflation figures, due later today.

From a technical perspective, the emergence of fresh buying near the 0.6865-0.6860 confluence hurdle breakpoint supports prospects for further gains. The said area comprises the top end of a one-month-old descending channel and the 38.2% Fibonacci retracement level of the August-September decline.

This should now act as a pivotal point for intraday traders. Any subsequent pullback could be seen as a buying opportunity near the overnight swing low, around the 0.6825 area. This, in turn, should limit any further losses for the AUD/USD pair near the 0.6800 round figure, or the 23.6% Fibo. level.

A convincing break below the latter will suggest that the corrective bounce has run out of steam and shift the bias back in favour of bearish traders. The AUD/USD pair could then drop to the 0.6730 intermediate support en route to the 0.6700 mark and the YTD low, around the 0.6680 region.

On the flip side, sustained strength beyond the 0.6900 mark is likely to confront stiff resistance near the 100-day SMA, currently around the 0.6960 area. Some follow-through buying should pave the way for a further appreciating move and allow the AUD/USD pair to reclaim the 0.7000 psychological mark.

AUD/USD 4-hour chart

Key levels to watch