AUDUSD is under pressure and fell for a fourth consecutive day today. The pair has approached a critical area and could close below the 50% Fibonacci retracement level of the uptrend from 0.7328 to 0.8124.
The bias is now clearly to the downside and a daily close below 0.7724 (50% Fibonacci) could trigger a deeper decline towards the 200-day moving average at 0.7691 and then to the 61.8% Fibonacci at 0.7632. Additional support is expected at an area of congestion at 0.7515 (which acted as both support and resistance in the past) before reaching the 0.7328 low touched on May 9.
The market would have to rise back above the 0.7900 level (50-day MA) to weaken immediate downside pressure but only a move above the psychological level at 0.8000 would indicate that the short-term bearish phase has ended. Clearing this key level would see a re-test of the 0.81241 peak and from here prices would likely resume the uptrend that started from the May low of 0.7328.
AUDUSD is expected to remain bearish in the short-term since the RSI indicator is showing downside momentum. Looking at the bigger picture, the upward trajectory from May stalled in September, setting up the market for a potential reversal of that bull run.
Origin: XM
