AUD/USD picks up and returns to levels past 0.7200

• Australian dollar's recovery from 0.7160 lows extends beyond 0.7200.
• Upbeat Chinese data and a softer UD dollar are underpinning aussie's rebound.
• Above 0.7225, The AUD/USD might extend to 0.7245 and 0.7310.

The Australian dollar has been building up momentum on Tuesday’s European session. The pair’s recovery from a two-week low of 0.7170 has reached intra-day highs at 0.7225 so far.

Chinese data and a weaker US dollar have buoyed the AUD

The AUD/USD has managed to pick up about 0.7% on the day so far to regain lost ground after dropping about 2.5% over the previous two days. A set of upbeat Chinese macroeconomic figures and the US dollar’s downside correction are supporting Aussie’s rebound.

Earlier today, Chinese data has beaten expectations with industrial production growing at a 7.5% pace year-on-year and retail consumption expanding at a 6.7% yearly pace in February.

Beyond that, the moderate reversal posted by the US dollar, with the Dollar Index about 0.5% down on the day on the back of retreating US Bond yields has contributed to the Australian dollar’s recovery.

AUD/USD testing resistance at 0.7225

From a technical point of view, the pair seems to be struggling to breach 0.7225area, where previous intra-day support meets the 100-day SMA.

Above here, the next potential targets might be 0.7245 (March 8 low) and the 200-day SMA, at 0.7310 before aiming towards March 10, 11 highs at 0.7365.

On the downside, a bearish reversal past 0.7200 would expose the mentioned two-week low at 0.7165 before eyeing Feb. 28 low at 0.7140 and Feb. 15, 24 lows at 0.7090/95.

Technical levels to watch