AUDUSD is recording its third day of losses with strong momentum, reaching a seven-week low at 0.7026 earlier today. The price plunged beneath the 23.6% Fibonacci retracement level of the downleg from 0.8135 to 0.6746, around 0.7070 and the Ichimoku cloud in the daily timeframe, suggesting a retest of the 0.7000. If the price pauses around the latter level this would confirm the sideways channel with upper boundary 0.7200 and lower boundary 0.7000.
The short-term bias looks negative as the MACD keeps losing ground below its trigger line, while the RSI seems to be making its way down below its 50-neutral mark. Moreover, the price is capped by the 20- and 40-simple moving averages (SMAs), which are ready to create a bearish cross.
The 0.7000 psychological level could be a trigger point for steeper bearish action and if there is a break of this significant line, investors could turn their attention on the 0.6825 support, taken from January 2016, turning the neutral outlook to bearish.
However, if the pair reverses back to the upside, immediate resistance is coming from the 23.6% Fibonacci of 0.7070 ahead of the lower surface of the Ichimoku cloud around 0.7100. If the price continues to rise, resistance could next be faced somewhere near the 0.7200 handle.
Overall, the strong sell-off over the last days did not change the neutral bias. Any drop below 0.7000 could resume long-term bearish structure.
