• AUD/USD gained strong positive traction on Wednesday and moved away from the one-month low.
• Tuesday’s hawkish RBA minutes extended support to the aussie amid modest USD profit-taking slide.
• Sustained weakness below the 0.7345 confluence support is needed to confirm a fresh bearish break.

The AUD/USD pair maintained its strong bid tone through the first half of the European session and was last seen trading the four-day high, around the 0.7430-0.7435 region.

The Australian dollar drew some support from the hawkish minutes of the Reserve Bank of Australia April Board meeting released on Tuesday. This, along with modest US dollar pullback from the highest level since March 2020, assisted the AUD/USD pair to gain strong positive traction on Wednesday.

From a technical perspective, bulls on Tuesday defended confluence support comprising of an ascending trend-line extending from the YTD low and the 50-day SMA. The subsequent move beyond the 23.6% Fibonacci retracement level of the 0.7662-0.7342 sharp corrective fall favours bullish traders. The constructive outlook is reinforced by the fact that oscillators on hourly charts have been gaining positive traction and recovered from the bearish territory on the daily chart. Hence, some follow-through strength towards the 38.2% Fibo. level, around the 0.7465 area, remains a distinct possibility.

On the flip side, the 0.7400 round-figure mark now seems to protect the immediate downside. Any further decline might continue to find decent support near the aforementioned confluence, currently around the 0.7345 region, which if broken will be seen as a fresh trigger for bearish traders. The AUD/USD pair could then accelerate the fall towards testing the next relevant support near the 0.7300 mark. The downward trajectory could further get extended towards the 0.7255-0.7250 support zone.

AUD/USD daily chart

Key levels to watch