The AUD/USD is showing signs of bottoming as fading geopolitical concerns restore investor confidence.
The AUD/USD was riding high above 0.8000 in late January and then started to trend lower when heightened volatility caused a more than 10% drop in the S&P 500 from the all-time highs in early February.
The VIX continues to pull back from extreme highs and closed below 13 on Friday, the lowest weekly close since late January.
Rising equities, falling volatility, steady commodities and a bounce in emerging market assets could set the scene for an AUD/USD correction higher.
The AUD/USD 5 & 10-day moving averages have started to tilt higher for the first time since April 19, suggesting a loss of downward momentum.
A close above the 21-day MA around 0.7585 would likely confirm a correction higher is underway, with the initial target at 0.7660, the 61.8 Fibo of the 0.7813-0.7413 April-May decline.