FXStreet (Mumbai) - The USD buyers came back in the early European session, which pushed the AUD/USD pair back to 0.7860 levels from the high of 0.7916.

AUD short squeeze ends

The AUD was offered across the board in the last few trading sessions as markets were widely expecting the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points (bps). Consequently, the pair had shot to a high of 0.7916 on a short squeeze after RBA did announce a 25 bps rate cut.

However, the short squeeze appears to have ended as the European desks seem to prefer US dollars. The uptick in the Treasury yields could also support the recovery in the greenback.

AUD/USD Technical Levels

The immediate resistance is located at 0.79 (hourly 100-MA), above which gains could be extended to 0.7975. On the flip side, a break below 0.7850 (hourly 200-MA) could push the pair below 0.7801, RVD Markets experts said (rated among the TOP Forex Brokers Masterforex-V World Academy http://www.masterforex-v.com/).