AUD/USD Price Analysis: Responsive buyers to defend 0.6970, pullback seems on the cards

• The 0.6968-0.6992 range demand zone will act as a pullback zone for the asset.
• Descending 20- and 50-EMAs are still favoring greenback bulls.
• The RSI (14) is expected to rebound as exhaustion looks likely.

The AUD/USD pair dropped sharply on Monday after slipping below the crucial support of 0.7030, which is the previous week’s low. The asset has recorded a low of 0.7004, short of the psychological support of 0.7000. A bearish open test-drive move has been displayed in the Asian session as the asset found responsive sellers on printing a marginal high of 0.7070 after opening at 0.7064.

The asset has remained vulnerable in the last week after posting a high of 0.7266. An ongoing bearish momentum is likely to drag the asset the demand zone placed in a range of 0.6968-0.6992. The major is likely to find a pullback as profit-booking may kick in.

The 20-and 50-period Exponential Moving Averages (EMAs) at 0.7205 and 0.7273 respectively are scaling lower, which still favors the downside. Meanwhile, the Relative Strength Index (RSI) (14) is showing minor signs of exhaustion below 40.00.

The asset is expected to deliver a pullback after slipping near the demand zone placed in a range of 0.6968-0.6992. This may push the asset higher towards the February 14 low at 0.7085, followed by the 20-EMA at 0.7205.

On the flip side, greenback bulls may continue their bullish momentum if the asset drops below the above-mentioned demand zone decisively. This will send the asset towards the 2 July 2020 low and the round level support at 0.6902 and 0.6800 respectively.

AUD/USD daily chart