The AUDUSD pair at a rate of 0.65723 is still cautious after recovering from a low point seen two months ago, as it continues an upward movement for three consecutive days.

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• AUD/USD remains defensive after bouncing off two-month low, following a three-day uptrend.

The pair currently trades last at 0.65723.

The previous day high was 0.661 while the previous day low was 0.6543. The daily 38.2% Fib levels comes at 0.6584, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6568, expected to provide support.

AUD/USD stays defensive near 0.6575 after posting a gradual three-day rebound from the lowest level since early June. That said, the Aussie pair witnessed a sluggish start to the key week amid an absence of major data/events, as well as mixed concerns about the US Federal Reserve’s (Fed) next move. Furthermore, concerns about China also troubled the Aussie pair traders.

On Monday, the US Dollar initially remained firmer after the hawkish comments from Federal Reserve (Fed) Governor Michelle Bowman as he said that additional rate increases will likely be needed to lower inflation back to target. However, the greenback dropped afterward as New York Fed President John C. Williams said he expects that interest rates could begin to come down next year. The policymaker also conveyed hopes of witnessing a slightly higher unemployment rate as the economy cooled.

Elsewhere, China’s Ministry of Water Resources cited a stronger response for flooding to Level III in Inner Mongolia, Jilin and Heilongjiang while highlighting the recently escalating fears from typhoon Doksuri. The Reuters news also mentioned that China has a four-tier emergency response system, with Level I being the most urgent.

It should be noted that Friday’s downbeat US employment report and chatters that the major central banks are near to the policy pivot allowed market players to take a breather after witnessing the final week of July with a risk-off mood. With this, the sentiment improved and allowed Wall Street to remain firmer while probing the US Treasury bond yields as they consolidated Friday’s heavy fall, which in turn put a floor under the US Dollar.

Moving on, Australia’s Westpac Consumer Confidence and National Australia Bank’s (NAB) Sentiment data for August and July will precede China’s foreign trade data for July will be important to watch for clear directions. Following that, the US Trade Balance for June and the risk catalysts will be eyed. Above all, Wednesday’s China Consumer Price Index (CPI) and Thursday’s Australia Consumer Inflation Expectations, as well as the US CPI, are the key for the AUD/USD pair to watch for a clear guide.

AUD/USD recovery remains elusive below the bout bottoms marked in late June and early July, around 0.6600 by the press time.

Technical Levels: Supports and Resistances

AUDUSD currently trading at 0.6572 at the time of writing. Pair opened at 0.6569 and is trading with a change of 0.05% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.6721, 50 SMA 0.6702, 100 SMA @ 0.6689 and 200 SMA @ 0.6733.

The previous day high was 0.661 while the previous day low was 0.6543. The daily 38.2% Fib levels comes at 0.6584, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6568, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.6538, 0.6507, 0.6471
• Pivot resistance is noted at 0.6605, 0.6641, 0.6672

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