AUDUSD continues to drive sideways for the third consecutive week within the 0.7288 – 0.7430 boundaries and at the bottom of a short-term downtrend, struggling to extend any upticks above the 20-day simple moving average (SMA).
The technical oscillators reflect an indecisive market as well. The RSI could not return above the broken tentative ascending trendline, questioning the bulls’ strength, whereas the MACD managed to gain more ground above its red signal line, but it has yet to enter the positive territory. Meanwhile in Ichimoku indicators, the red Tenkan-sen line remains flat below the blue Kijun-sen line, keeping the bias on the bearish side.
In other important notes, the 50- and 200-day SMAs continue to deviate after negatively intersecting each other, foreseeing a negative trend reversal. Also, the longer the sideways move, the more significant the breakout could be.
A close above the 0.7400 – 0.7430 box could face constraints near the 50-day SMA and the 0.7475 resistance area. Should the bulls crawl higher, the next obstacle could emerge near the 38.2% Fibonacci retracement of the latest down leg at 0.7518. A violation at this point could add more fuel to the rally, likely bringing the 50% Fibonacci of 0.7589 and the 200-day SMA into view.
In the bearish scenario, where the pair exits the range zone on the downside, support could initially pop up within the 0.7255 -0.7230 territory, last active during November 2020. Deeper, selling pressures could decelerate somewhere between 0.7165 and 0.7140, while the restrictive line, which joins all the peaks and troughs from January, will be closely watched in the case of sharper declines.
Summarizing, AUDUSD is sending mixed signals for short-term trading, with investors waiting for a break above the 0.7400 – 0.7430 area or below the 0.7288 low to decide on their next actions.
Origin: XM
