AUD/USD Price Analysis: Pullback needs validation from 0.6785 support and US Retail Sales

• AUD/USD retreats from the highest level since late February, pokes eight-day-old ascending support line.
• Overbought RSI, downbeat sentiment suggests further downside of the risk-barometer pair.
• Aussie bears also need softer US Retail Sales, mid-tier activity data for conviction.

AUD/USD fades a five-day-old bullish momentum at the highest levels in nearly 16 weeks as markets await more clues to confirm the Fed’s hawkish bias for the July rate hike.

In doing so, the Aussie pair struggles to cheer upbeat employment and inflation data from home, as well as downbeat China statistics during early Thursday. That said, the Aussie pair remains indecisive near 0.6795 as it prods a short-term support line at the latest.

Also read: AUD/USD bounces off daily low on upbeat Australian jobs report, up next Chinese macro data

Technically, an upward-sloping trend line from June 05, near 0.6785 at the latest, restricts immediate AUD/USD downside even as the overbought RSI (14) line signals the pair’s pullback moves.

However, a clear downside break of the stated support line will make the AUD/USD pair vulnerable to declining towards the mid-May swing high of around 0.6710 ahead of targeting the 200-SMA level surrounding 0.6655.

On the other hand, AUD/USD recovery should witness downbeat US data and easing odds of the Fed’s July rate hike to again aim for the key resistance line stretched from mid-April, close to 0.6835.

Following that, a run-up towards the December 2022 peak of around 0.6895 and then to the 0.6900 round figure can’t be ruled out.

AUD/USD: Four-hour chart

Trend: Limited downside expected