AUD/USD Price Analysis: Looking heavy under 0.7270 but recent uptrend intact

• AUD/USD trades marginally lower on Wednesday, but losses are better contained than most other major USD pairs.
• The Australian dollar remains above upwards trendline support, but could test hit support at 0.7240 upon a break.

AUD/USD trades marginally lower on the day on Wednesday by around 20 pips or 0.3%, weighed by a broad pick up in USD strength since the European session began. Compared to most other USD major pairs, however, losses are well contained; EUR/USD trades lower by around 70 pips or 0.6% and GBP/USD lower by around 70 pips or 0.5%. AUD/USD is seeing more modest losses as a result of its correlation to NZD/USD, which got a sizeable boost in wake of today’s RBNZ meeting and still trades solidly in the green.

For now, AUD/USD’s recent uptrend since the end of last week remains intact; the pair has been respecting a trendline linking the low of 6 November 2020, 10 November 2020, and the low set a few hours ago.

If AUD/USD breaks below this trendline, a test of the 6 November 2020 low/9 October 2020 high at around 0.7240 could be on the cards. Conversely, if the bulls prevail over the coming days and keep AUD/USD on an upward trajectory, a test of Monday’s high at 0.7340 is likely.  

Looking at AUD/USD on a longer timeframe, the pair continues to reside close to the top of its recent 0.70-0.7350 range that has prevailed since mid-September. If the pair can rally above 0.7350, the door will be open for a re-test of 2020 highs at just above 0.7400. Conversely, if the pair fails in its attempts to break out to the upside of its multi-month recent range, the bears could send the pair gradually back down towards 0.70. 

AUD/USD 4-hour chart

AUD/USD additional levels