AUDUSD found strong support at the 18-month trough of 0.6965 in the previous week, rallying towards the 20-day simple moving average (SMA). However, the RSI indicator is suggesting a weakening bias as it is turning lower in the negative region, while the MACD is still holding below the zero level but is strengthening its positive move.
Should the price retreat, the 0.6990 barrier and the 18-month low of 0.6965, which the bears were unable to break the previous week, could provide immediate support. Moving lower, the focus will shift to the 0.6775 restrictive area, taken from the low in June 2020.
In the alternative scenario, traders would be eagerly looking for a break above yesterday’s top near the 20-day SMA of 0.7155 to increase buying orders. If that’s the case, the rally could last until 0.7270, the upper surface of the Ichimoku cloud. If bullish forces appear even stronger, 0.7315 and the 200-day SMA at 0.7380 should be additional resistance levels to keep in mind.
The recent bullish action turned the short-term view to slightly positive, though the bigger picture is still negative and only an advance above the 200-day SMA may change this outlook.
