AUD/USD Forecast: Short-Term Technical Bias Turns Neutral, But Bigger Time Frames Support Further Gains

• AUD/USD fails to break above 0.7000 and retreats.
• Risk aversion mounts pressure on the Australian dollar.
• Short-term technical bias turns neutral, but bigger time frames support further gains.

The AUD/USD hit a fresh four-week high of 0.7000 during the European session, marginally above Wednesday's top. Still, it was rejected from the psychological level and fell to the 0.6950 area before finding support. The Aussie failed to hold onto gains and turned negative for the day during the New York session as investors' sentiment took a U-turn to the downside. Stocks pulled back and oil prices slumped amid high volatility and concerns that the rise in COVID-19 cases could lead to new lockdown measures in the world's major economies.

The AUD/USD has lost upward potential and the short-term technical picture has turned mostly neutral, with indicators holding barely above their midlines and the price falling below the 20-period SMA in the 4-hour chart. However, the bullish bias persists in the daily chart. The AUD needs to break above the 0.70 level to gain bullish momentum to attempt a retest of June's highs at the 0.7065 area. On the flip side, a loss of the 0.6905-00 region – the confluence of the 20-day SMA and the psychological level – could exert some pressure in the short-term and send the price toward 0.6830.

Support levels: 0.6920 0.6900 0.6830

Resistance levels: 0.7000 0.7030 0.7065

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