AUDUSD tumbled in the wake of the hawkish FOMC policy announcement late on Wednesday, but the bearish wave was not strong enough to violate the 0.7600 level and send the price out of the three-month-old range area.
Negative pressures could persist in the short term as the MACD is growing bearish below its signal and zero lines, while the RSI has yet to reach its 30 oversold level despite the harsh drop below its 50 neutral mark. Yet, an upside correction cannot be excluded as the latter seems to be flirting with a former support region and the fast-Stochastics are heading for a bullish cross below their 20 oversold number.
For the sellers to gain extra ground towards the 200-day simple moving average (SMA) and the lower boundary of the range at 0.7531, the 0.7600 support should give way. Running lower, the price may take a breather somewhere between 0.7463 and 0.7400, with the latter being a former resistance region and slightly under the 23.6% Fibonacci retracement of the 2020 rally.
Alternatively, a bounce above the tough ceiling of 0.7770 – 0.7815 could prompt a bullish extension towards May’s high of 0.7890. A steeper rebound may falter around 0.7965, while higher, a more important obstacle could emerge around 0.8035 – a key restrictive zone during 2017.
In brief, AUDUSD has adopted a bearish bias following Wednesday’s slump. Despite that, the price has not escaped its neutral trajectory and managed to hold above a key support level, making an upside reversal or some consolidation likely in the near term.
Origin: XM
