AUD/USD Price Analysis: Recaptures key support-turned-resistance at 0.6575

• AUD/USD recovers above key 200-day SMA support-turned-resistance, as US Dollar turns south.
• Daily RSI is firming up above the midline while the 21-day SMA at 0.6535 offers strong support.
• If AUD/USD buyers reclaim 97.00, a rally to 98.00 is on the cards.

AUD/USD is on a solid recovery mode above 0.6550 on Wednesday, reversing half the previous day’s sell-off. The pair’s rebound is supported by a retreat in the US Dollar across the board, as traders turn cautious ahead of the key US ADP employment report.

However, Aussie buyers seem to face rejection just shy of the 0.6600 level amid renewed China debt worries. Moody’s Investors Service on Tuesday downgraded its outlook on China’s government credit ratings to negative from stable.

The further upside in the Aussie could remain capped, courtesy of the dovish pause by the Reserve Bank of Australia (RBA) a day ago. The RBA held the interest rate steady at 4.35% in November while maintaining a cautious tone on its interest rate outlook.

AUD/USD technical analysis: Daily Chart

From a short-term technical perspective, the pair has recaptured the 200-day Simple Moving Average (SMA) at 0.6575 on the road to recovery, having settled Tuesday below the latter.

The 14-day Relative Strength Index (RSI) is pointing north while above the midline, justifying the bounce in the Aussie pair.

Buyers need acceptance above the 200-day SMA to initiate a fresh uptrend toward the July 31 high of 0.6740. Ahead of that, the 0.6700 level could challenge the bearish commitments.

 On the downside, strong support is envisioned at the 21-day SMA at 0.6535, below which the 0.6500 mark will be the next cushion. Deeper declines will test the 100-day SMA at 0.6469.

AUD/USD: Additional technical levels