AUD/USD bid around 0.6870, bulls need progress soon

• AUD/USD is bid around 0.6870 but remains below key Fibonacci level of 0.6880.
• Charts show signs of bullish exhaustion above 0.6880.

AUD/USD is currently trading at 0.6870, representing moderate gains on the day, having hit a low of 0.6859 earlier today. 

The Australian currency has recovered sharply from lows below 0.67 in the last few days as China's rate cut eased pressure on the Reserve Bank of Australia to do more and the fading US-China trade tensions boosted risk sentiment. 

China on Wednesday published its first batch of tariff exemptions for 16 types of US products. In response, the US President Trump delayed a scheduled tariff hike on $250 billions worth of Chinese goods by two weeks to Oct. 15.

Stuck at 50% Fib

The rally has stalled at 0.6680, which is the 50% Fibonacci retracement of the drop from 0.7082 to 0.6677. 

The pair clocked highs above 0.6680 but failed to close above that level in the last two days. Notably, Wednesday's candle was a Doji and Thursday's candle had a long upper wick, both signaling bullish exhaustion. 

So, a quick sustained move above 0.6680 is needed to keep the bullish bias intact. Another rejection above the 50% Fib level could yield a correction, possibly to levels below 0.6850. 

Technical levels