AUDUSD produced a false break of the 0.7988 high, identified in February 2018, touching a 3-year peak of 0.8006 before plummeting below the simple moving averages (SMAs) and pivoting at 0.7691. The SMAs are still supporting the pair’s bullish demeanour in spite of the diminished upward slopes of the 50- and 200-period SMAs.
Nevertheless, the plunging red Tenkan-sen line is endorsing the aggressive negative price action, while the flattening blue Kijun-sen line is reflecting the pair’s recent bounce. Although the short-term oscillators are also mirroring the latest price jump, they are looking set to tilt further negative. The MACD is far beneath the zero threshold and is distancing itself below its red trigger line, while the static RSI appears to be favouring the downside. The stochastic oscillator however is maintaining its bullish backing of the price, promoting the upside.
If sellers manage to close underneath the firm 200-period SMA at 0.7739, primary support may arise from the 0.7681-0.7700 section. Successfully diving past this obstacle, which contains the retracement’s critical trough of 0.7691, the bears may then aim for the limiting region of 0.7647-0.7662. Should the price correction mature further, the support base of 0.7556-0.7591, which consists of multiple lows, may try to deter sellers in their endeavours to push lower.
Alternatively, if buyers re-emerge, initial resistance may occur at the 100-period SMA at 0.7787, where the red Tenkan-sen line also currently resides. Pushing over this level, the Ichimoku cloud’s lower surface at 0.7829 may be next to hinder the climb towards the 50-period SMA at 0.7848, and the adjacent barrier of 0.7855. If the improvement in price conquers these hurdles too, resistance could then be found between the 0.7879 and 0.7900 inside swing lows.
Overall, AUDUSD seems somewhat glued around its 200-period SMA at 0.7739 with the price looking to challenge the nearby support zones. A break below the 0.7556-0.7591 base would begin to put pressure on the broader positive bias.
Origin: XM
