AUDUSD hovered quietly near Wednesday’s closing price of 0.6757 during Thursday’s early European trading hours after negligibly rotating at the two-year low of 0.6710.
The penetrated support line drawn from the August 2021 low of 0.7105 is now acting as resistance around the same region, preventing any increases towards the 20-day simple moving average (SMA) at 0.6850. Even higher, the tentative descending trendline and the 50-day SMA around 0.6978 may also defend the negative trend in the market ahead of the 0.7070 high from June 16.
The technical oscillators are not displaying any bullish appetite either. The RSI keeps moving halfway below its 50 neutral mark while maintaining a flat trajectory, and the MACD is also consolidating its latest bearish wave marginally beneath its red signal line.
If the price retreats below the recent low of 0.6710, the 0.6665 zone, which was a key constraining zone during the August 2019 – May 2020 period, could immediately halt the decline. In case it gives way though, the focus will turn to the 0.6540 territory taken from spring 2020. This is also where the 161.8% Fibonacci extension of the 0.6828 – 0.7282 upleg resides. Another violation at this point could see a continuation towards the 0.6400 handle last seen in May 2020.
In brief, the short-term outlook for AUDUSD is still looking gloomy despite the latest pause in the sell-off. The 0.6710 – 0.6665 territory is now the next test for the bears, while the bulls will need to push harder to raise buying confidence above 0.6978.
Overall, the more than a year negative trend is still well-established below 0.7282.
