FXStreet (Guatemala) - AUD/USD has managed to cling on to territory on the 0.70 handle in a reversal of the December downtrend at 0.7320 and has formed a bullish case through the 20 dma at 0.7021. AUD/USD rallied from the lows of the Dec downtrend at 0.6834, struggled with the 0.70 handle for a 4 day period and recently was propelled higher on some relief in the commodities sector, prospects of the FOMC on hold and the overnight upside surprises in the nation's Q4 CPI's. However, the price of oil and China will remain on the coattails of the bulls holding them back and bears will take all opportunities to fade the recovery on negative sentiment, possibly with strong offers ahead of the declining 100 DMA at 0.7141 today that converges with the 50 and 55 sma on the same time frame at 0.7145 and 0.7140 respectively. We have the FOMC coming up and this will be the next key catalyst one way or another, (or perhaps not at all) before the US GDP on Friday (watch live coverage here) and the RBA meeting next week while China may become less of a concern in the very near term with the New Year celebrations at the start of February giving markets a breather from the shock factor of any possible near term negative surprises from the Chinese economy, authorities and market. AUD/USD levels Technically, Karen Jones, chief analyst at Commerzbank explained, "Our favoured scenario is that the market will fail ahead of its 55 day ma. Longer term the risks are on the downside and we target the 0.6774 2004 low. Near term we look for a correction higher - we note that the weekly RSI did not confirm the new low. Nearby support at .6920 guards the 0.6828/29 recent lows." Watch FOMC live coverage here For more information, read our latest forex news.