AUD/USD has retracted some of the gains made in June and is approaching potential support of 0.6560/0.6510, the 76.4% retracement of that bounce. Economists at Société Générale analyze the pair’s technical outlook.

Break above 0.6720 is essential for confirming a larger up-move

Daily MACD has been posting positive divergence denoting receding downward momentum. A bounce is expected however break above the high formed last week at 0.6720 is essential for confirming a larger up-move. 

If AUD/USD fails to defend 0.6560/0.6510, there would be risk of one more down leg towards May low of 0.6450 and projections of 0.6200/0.6170.