Title: AUD/USD Price Analysis: Bulls need to strike 0.6770 with sheer confidence

September 20, 2022 12:01 AM ET

By: AnalysisWatch

The AUD/USD currency pair recovered sharply after correcting to near 0.6713 in the Tokyo session. The asset strengthened on the back of a firmer settlement above the round barrier at 0.6700. The major currency broke the immediate resistance at 0.6732 and is struggling to hold above the same level.

On an hourly basis, the commodity-sensitive currency rebounded sharply after testing a two-year low at around 0.6680. The formation of a double bottom formation on the chart suggests lower selling pressure on retesting the lows and the dried up selling resulted in a vertical move higher. The path forward will be difficult for the counterparts, who will face challenges around the horizontal resistance located around the September 1 low of 0.6770.

The exponential moving average (EMA) with a period of 50 at 0.6713 acts as a major cushion for the counter. While the 200-EMA at 0.6754 is still higher, which could spoil the mood for Australian investors,

The Relative Strength Index (RSI) (14) is on the verge of shifting to a bullish range of 60.00-80.00, which will bring vertical gains ahead.

Australian bulls will strengthen further if the asset breaks the aforementioned critical hurdle at 0.6770.

This will lead the asset towards its September 5 high at 0.6832, followed by last week's high at 0.6916.

Alternatively, a break below the aforementioned demand zone will drag the asset towards support at the round 0.6600 level. If the asset breaks below this level, it will be pulled towards the May 2020 low at 0.6520.