AUD/USD Price Analysis: Trims a part of modest intraday gains, bearish potential intact

• AUD/USD gained some positive traction on Wednesday, albeit struggled to capitalize on the move.
• The set-up seems tilted firmly in favour of bearish traders and supports prospects for further losses.
• Bears might still wait for a sustained break below the 0.7220 support before placing aggressive bets.

The AUD/USD pair struggled to capitalize on its modest intraday gains and has now retreated around 20 pips from the daily swing highs.

Following a brief consolidation during the first half of the trading action on Wednesday, the US dollar regained positive traction and shot to the highest level since early November 2020. This, in turn, was seen as a key factor that acted as a headwind for the AUD/USD pair and capped the upside.

However, a solid rebound in the equity markets held traders from placing fresh bets around the safe-haven greenback and continued lending some support to the perceived riskier aussie. The AUD/USD pair, so far, has managed to preserve modest gains and was last seen trading just below mid-0.7200s.

Given the overnight rejection slide from the 0.7310-15 supply zone, the near-term bias still seems tilted in favour of bearish traders and support prospects for further losses. The negative outlook is reinforced by the fact that oscillators on hourly/daily charts are holding in the bearish territory.

That said, it will still be prudent to wait for a sustained break below the 0.7220 horizontal support before positioning for any further decline. This is closely followed by the 0.7200 mark, which if broken decisively will reaffirm the bearish bias and prompt aggressive technical selling.

The AUD/USD pair might then accelerate the slide towards testing intermediate support near the 0.7135-30 region. The downward trajectory could further get extended and allow bearish traders to aim back challenge YTD lows, around the 0.7100 round-figure mark touched on August 20.

On the flip side, immediate resistance is pegged near the 0.7290 region. Any subsequent move up might continue to meet with some fresh supply near the 0.7310-15 area. A sustained move beyond could trigger a short-covering move and push the AUD/USD pair towards the 0.7365 area en-route the 0.7400 mark.

AUD/USD 4-hour chart

Technical levels to watch