AUD/USD Price Analysis: Sticks to recovery gains, around 0.7430-35 area ahead of US CPI

• AUD/USD staged modest recovery from the multi-year low touched earlier this Tuesday.
• Resilience below the 0.7400 mark/50% Fibo. level warrants caution for bearish traders.
• Sustained move back above the 0.7500 mark will shift the bias back in favour of bulls.

The AUD/USD pair attracted some buying near the 0.7400 mark, or the three-week low touched earlier this Tuesday and for now, seems to have snapped a four-day losing streak. The pair held on to its modest recovery gains through the first half of the European session and was last seen trading around the 0.7430-0.7435 region, up over 0.20% for the day.

From a technical perspective, the recent sharp pullback from the highest level since June 2021 showed some resilience below the 50% Fibonacci retracement level of the 0.7165-0.7662 strong rally. This is closely followed by the 200-period SMA on the 4-hour chart, around the 0.7385 region, which should now act as a key pivotal point for short-term traders.

Some follow-through selling below the aforementioned support could pave the way for an extension of the corrective slide towards the 61.8% Fibo. level, around mid-0.7300s, en-route the 0.7325 region. The latter coincides with an ascending trend-line extending from sub-0.7000 levels, or the YTD low, which if broken will be seen as a fresh trigger for bears.

With technical indicators on the daily chart losing positive traction and holding deep in the bearish territory on the 4-hour chart, the AUD/USD pair could then turn vulnerable to test the 0.7300 mark. The downward trajectory could further get extended towards the 0.7240 region en-route the 0.7200 round figure and the 0.7175-0.7170 support zone.

On the flip side, the 38.2% Fibo. level, around the 0.7470 area now seems to act as an immediate strong resistance ahead of the 0.7500 psychological mark. Sustained strength beyond would suggest that the corrective pullback has run its course and shift the bias back in favour of bullish traders, setting the stage for the resumption of the prior uptrend.

The AUD/USD pair might then aim to surpass an intermediate resistance near the 0.7535-0.7540 region and reclaim the 0.7600 round-figure mark. Some follow-through buying has the potential to lift spot prices further towards the 0.7635-0.7640 region en-route the YTD peak, around the 0.7660-0.7665 area touched earlier this month.

AUD/USD 4-hour chart

Key levels to watch