The Australian dollar may be forming a base after trending lower for the past five weeks.
The price action following China's dismal monthly activity data on Monday might be a starting point for an AUD/USD recovery nL2N2X8047.
Much weaker-than-expected Chinese retail sales and industrial output for April laid bare the deleterious impact of Shanghai's lockdown on the economy.
The AUD/USD fell 0.80% to 0.6873 in a knee-jerk reaction to the data before reversing higher to close at 0.6971 - up 0.49% from Friday's close.
What's more, the AUD ended Monday higher against most major currencies.
The stunning turnaround was mainly driven by the view that China is finally taking steps to exit the lockdown and once ended, the pent-up demand will spur a strong bounce in China's data in the coming months nL5N2X803O.
The commodity market appeared to have come to the same conclusion, as Dalian iron futures gained over 2.0%, while oil and copper also closed higher on the day nL2N2X80EZ.
With the worst-case scenarios already baked into the AUD/USD price, the bar is set low for bargain-hunters following a 10.8% decline since April 5.
Resistance at the 10-day moving average at 0.7003 was briefly breached following hawkish RBA minutes Tuesday nL2N2X902Z and a close above that level would warn the downtrend has lost momentum.
A break above the 21-DMA at 0.7105 would confirm a bottom is in place.
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