AUDUSD is continuing last week’s rebound but with slower momentum, reaching one-month highs at 0.7170 today and at the same time confirming another lower low at 0.6746(decade low) within its long downward pattern. The short-term bias looks positive as the MACD keeps gaining ground above its red signal line, while the RSI seems to be making its way up above its 50-neutral mark, though more progress is needed from the latter.
The 50-day simple moving average (MA) currently at 0.7185 could be a trigger point for steeper bullish action if the pair manages to break the line. This is also slightly below the 50% Fibonacci of 0.72 of the donwleg from 0.7675 to 0.6746 and hence should attract some attention. Higher, resistance could run towards the 61.8% Fibonacci of 0.7316, a strong barrier last year, though more buyers could be waiting to enter once the price breaks above the 200-day MA at 0.7335 and more importantly the previous peak of 0.7392.
However, if the pair reverses back to the downside, investors could put a stop-loss order first at the 38.2% Fibonacci of 0.7095 and then at 0.7050. If the price continues to drop, support could next come somewhere between 0.6950 and 0.6826 before the focus shifts back to the 0.6746 bottom.
In the medium-term picture, the bounce off 0.6746 turned the outlook from negative to neutral again. Chances for another bullish move are still rising as the 200-day MA keeps falling towards the 50-day MA.
Origin: XM
