AUD/USD edged higher on Tuesday, extending gains for a third consecutive day to trade near 0.7002, close to one-week highs. The move was supported by a pullback in the US Dollar from the 18-month highs it touched the previous week, alongside a hawkish stance from the Reserve Bank of Australia.
Technical picture improves
Chart analysis points to a potential double bottom forming near 0.6900, specifically in the 0.6895-0.6900 zone. The Relative Strength Index has recovered to near 49, moving up from oversold territory, while the MACD reading is marginally positive. The pair nonetheless remains below its key daily moving averages, a sign that the broader trend has not yet turned decisively.
Immediate support sits at 0.6976, the 23.6 percent retracement level. A break below that would bring the 0.6895-0.6900 double-bottom zone back into focus.
Resistance levels ahead
On the upside, the 38.2 percent retracement at 0.7026 offers initial resistance, just above current trade. Further ceilings sit at the 100-day simple moving average near 0.7035 and the 200-day simple moving average near 0.7047.
Beyond those, the 50.0 percent retracement at 0.7067 and the 50-day simple moving average at 0.7077 mark the next barriers. Higher still, the 61.8 percent retracement sits at 0.7107, the 78.6 percent retracement at 0.7165, and the 100.0 percent retracement, which coincides with the cycle high zone, at 0.7238.
