FxWirePro: AUD/USD recovery lacks traction, break above 5-DMA required for further upside

AUD/USD chart on Trading View used for analysis

• AUD/USD has edged higher on the day and is trading at 0.7496 at the time of writing.
   
• Recovery in the pair lacks traction and we see major resistance at 1H 21-EMA at 0.7067.
   
• With broader economic slowdown impeding investment and US-China trade tensions still looming over sentiment, downside in the pair remains intact.
   
• According to a statement by China's Ministry of Commerce over the weekend, a vice-ministerial-level call between the US and China saw "a deep exchange of views" on trade imbalances and intellectual property protections.
   
• But, traders wait for concrete results and vague headlines will likely provide little optimism in the markets.
   
• AUD/USD has been on a major downtrend and recovery was capped at 200-DMA before the pair resumed downside with a bearish divergence.
   
• The pair has hit new 9-week lows at 0.7029 on Friday's trade. And further weakness will see test of 0.69 (Aug 2015 lows) ahead of 0.6827 (Jan 2016 low).
   
• On the flipside, breakout at 5-DMA could see upside till 21-EMA at 0.7177. Bearish invalidation only above 200-DMA.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.