• Loss of momentum around 0.7030 has triggered responsive buyers.
• A bull cross of 20- and 50 EMAs advocates a bullish bias.
• The asset needs to overstep the trendline placed from 0.7230 for further upside.

The AUD/USD pair is advancing higher gradually unlike the other assets which are trading lackluster ahead of the Fed’s monetary policy meeting. The pair have witnessed a firmer rebound after hitting a low of 0.7033 on Monday and is eyeing the 200-period Exponential Moving Average (EMA) at 0.7159.

A loss of downside momentum to near 0.7030 has triggered the responsive buyers, which have driven the asset higher. The exhaustion in the downtrend is visible from the Bullish Divergence formation on the momentum oscillator Relative Strength Index (RSI) (14). The continuation of lower lows by the asset was not accompanied by the RSI (14), which resulted in a bullish reversal. Also, the RSI (14) has shifted into a 40.00-60.00 range from the bearish range of 20.00-40.00, which fades the optimism of the greenback bulls.

A bull cross, represented by the 20- and 50-period EMAs at 0.7086 adds to the upside filters.

For a bullish momentum, the asset needs to overstep the trendline (placed from April 26 high at 0.7230) at 0.7150 decisively. This will send the asset towards the round level resistance at 0.7200, followed by April 22 low at 0.7234.

On the flip side, greenback bulls could regain strength if the pair drops below Monday’s low at 0.7033, which will send the asset towards the psychological support at 0.7000. Breach of the latter will drag the asset towards a 14 July 2020 low at 0.6921.

AUD/USD hourly chart