AUDUSD is flirting with the 32-month low over the last couple of sessions and holds below the 20- and 40-simple moving averages (SMAs) in the daily timeframe. The bearish trend though could stay in place given that prices continue to fluctuate beneath the long-term descending trend line.
According to the RSI, the market could maintain neutral to positive momentum in the very short-term as the indicator is sloping up, though the fast stochastics suggest that the market is looking more bullish above the oversold area; the blue %K line is fluctuating around the red %D line. Furthermore, the MACD oscillator is standing above the trigger line below the zero line.
On the upside, the price could attempt to overcome the 20-SMA at 0.7117 and retouch the falling trend line, which is just above the 40-SMA and the 0.7160 resistance level. Should traders continue to buy the pair above that significant obstacle, shifting the long-term downtrend to a more neutral one, resistance could then run towards the 0.7300 handle, which coincides with the 23.6% Fibonacci retracement level of the downleg from 0.8135 to 0.7040.
A continuation of the downside movement could find immediate support at the 0.7040 barrier, achieved on October 8. If the latter fails to halt bearish movements, the next target could be the 0.7000 round figure, identified by the bottom on February 2016. A sharp bearish rally below this hurdle could open the door for the 0.6830 support, reached on January 2016.
Overall, AUDUSD remains under negative pressure over the last nine months after it hit the 0.8135 level and failed to create a noteworthy bullish retracement.
Origin: XM
