AUD/USD Price Analysis: Extends recovery above 0.6400 as risk-on impulse regains traction

• Clarity over risk profile has supported the commodity-linked currency.
• The DXY has refreshed its day low at 110.75 amid a risk-on profile.
• Advancing 20-and 50-EMAs add to the upside filters.

The AUD/USD pair has extended its recovery after overstepping the immediate hurdle of 0.6416 in the Tokyo session. The commodity-linked currency has witnessed a decent buying interest as the US dollar index (DXY) has dropped sharply and has renewed the day’s low at 110.75.

Meanwhile, the S&P500 futures have regained their entire morning losses. The recovery in the risk-on profile is supporting the antipodean against the greenback.

On a four-hour scale, the cross has entered into the prior highest auction area, which is considered the recent most traded range. The balanced profile is plotted in a range of 0.6362-0.6544. Entry of the asset in the highest auction area indicates that the asset is challenging the inventory adjustment phase and a make-or-break move is expected ahead.

The asset has taken support at around the critical support of 0.6400, which was acting as resistance earlier.

The 20-and 50-period Exponential Moving Averages (EMAs) at 0.6448 and 0.6363 respectively are advancing, which adds to the upside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range. An upside momentum will get triggered once it will reclaim the bullish zone in a 60.00-80.00 range.

Going forward, a decisive break above October 4 low at 0.6451 will strengthen the aussie bulls. This will drive the asset towards October 4 high at 0.6548, followed by the round-level resistance at 0.6600.

On the flip side, a downside break of the October 20 low at 0.6229 will drag the asset toward the fresh two-year low at 0.6170 and April 2020 low at 0.5991.

AUD/USD four-hour chart