AUD/USD may be entering a renewed bullish phase as improving risk appetite, bullish RSI divergence, and support at the 50-day moving average reinforce upside recovery potential.
- AUD/USD held above its 50-day moving average, suggesting the recent corrective decline may have stabilized.
- Improving risk appetite and stronger global equities may support a bullish catch-up move in AUD/USD.
- Bullish RSI divergence signals potential uptrend with next resistance at 0.7265/0.7350, while 0.7085 remains key support.
The recent corrective pull-back of -2.7% seen on the AUD/USD from its 4-year high of 0.7265 printed on 6 May 2026 has managed to stall at the 50-day moving average.
Key technical elements and intermarket analysis now suggest a potential multi-week recovery in the AUD/USD.
Let’s unpack them.
AUD/USD may see a bullish catch-up
Fig. 1: Movement of iShares MSCI All Country World Index ETF with AUD/USD as of 22 May 2026 (Source: TradingView).
The Australian dollar has become increasingly sensitive to shifts in risk sentiment since the end of March 2026, as the AUD/USD has exhibited a close direct alignment with risk-on behaviour in global equities.
Using the iShares MSCI All Country World Index (ACWI) exchange-traded fund (ETF) as a gauge of global equities, the ACWI has managed to stage a rebound on its rising 20-day moving average after a recent retest of it on 19 May 2026, which indicates the medium-term uptrend phase of global equities since 30 March 2026 remains intact (see Fig. 1).
Despite the recent resurgence of risk-on sentiment seen on the ACWI, the AUD/USD has not traded back above its 20-day moving average. Given the potential leading-lagging factor, the AUD/USD may see a potential bullish catch-up.
Bullish momentum is indicating a potential recovery above the 20-day MA
Fig. 2: AUD/USD medium-term trend as of 25 May 2026 (Source: TradingView).
The price actions of the AUD/USD have managed to stage a rebound after a retest of its 50-day moving average on 19 May 2026, accompanied by a bullish divergence condition flashed out by its 4-hour RSI momentum indicator at its oversold region on 20 May 2026.
These observations suggest a potential build-up in medium-term bullish momentum conditions that may lead to a recovery and a new bullish impulsive up move sequence for the AUD/USD (see Fig. 2).
Watch the 0.7085 key medium-term pivotal support. A clearance above 0.7180/7210 intermediate resistance (also the 20-day moving average) may see the next medium-term resistances coming in at 0.7265 and 0.7350.
However, a break and a daily close below 0.7085 invalidates the recovery scenario for a potential extension of the corrective decline to expose the next medium-term supports at 0.6995/6945 and 0.6833 (also the key 200-day moving average).
The information presented is historical information, and past performance is not indicative of future performance.
