AUD/USD Price Analysis: Bounces firmly on multiple tests of 0.6770 the figure

• A short-term volatility contraction looks likely on a descending triangle formation.
• An establishment above the 50-period EMA will strengthen the aussie bulls.
• The RSI (14) is oscillating in a 40.00-60.00 that indicates a consolidation ahead.

The AUD/USD pair is scaling firmly higher after oscillating in a range of 0.6764-0.6787 in early Tokyo. The asset has rebounded strongly after defending its weekly lows at 0.6766. A responsive buying action has pushed the asset above the critical hurdle of 0.6800.

On an hourly scale, the aussie bulls have attracted significant bids after multiple tests of the crucial support placed from the July 1 low at 0.6766. The formation of the Descending Triangle is hinting for a consolidation going forward. The downward-sloping trendline of the aforementioned chart pattern is plotted from June 16 high at 0.7070.

The asset has crossed the 20-period Exponential Moving Average (EMA) at 0.6789 and is now attempting to sustain above the 50-period EMA, which is trading at 0.6802.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which indicates a consolidation ahead.

The context is still not bullish on a broader note. Therefore, investors should wait for a violation of Tuesday’s high at 0.6896 to initiate fresh longs. An occurrence of the same will drive the asset towards June 30 high at 0.6920, followed by June 28 high at 0.6965.

On the flip side, the greenback bulls could regain strength if the asset drops below July 1 low at 0.6766, which will drag the asset towards the 29 May 2020 high at 0.6683. A breach of the latter will drag the asset towards the 30 April 2020 high at 0.6570.

AUD/USD hourly chart