AUD/USD retreats from 1-week highs as US dollar recovers momentum

• AUD/USD peaked at 0.7438, 1-week highs but failed to hold and pulled back.
• A stronger greenback pushed the pair to the downside.

The Aussie outperformed during the Asian session following the RBA meeting and a rally in Chinese equities. Also, a decline of the US dollar contributed to the rally of AUD/USD. After the beginning of the American session, the greenback recovered momentum and trimmed losses.

The pair dropped from the weekly high to 0.7415. It was still up for the day but the bullish outlook in the very short-term was not as strong as hours ago. Higher US yields helped the greenback.

Overall, AUD/USD was still moving sideways in a range, without a clear direction in the short-term. The dominant trend was bearish but during the last weeks, it has been consolidating. A recovery above 0.7440 could lead to an extension of the recovery while below 0.7300, the downside could resume.

Technical levels

If the AUD/USD extends the slide, potential support levels might be seen at 0.7410, 0.7370 and 0.7340. On the upside, resistance could lie at 0.7440/45 (daily high/downtrend line from July 9 high) followed by 0.7465 and 0.7485.