AUDUSD is set to post the third consecutive bearish day as it remains under strong downside pressure after the bounce off the 0.7440 high, reached last Friday. The sharp sell-off especially this month endorses the scenario for further declines in the medium-term.
In the daily timeframe, the momentum indicators are supportive of the bearish picture, with the RSI falling into negative territory below 50 and approaching the 30 oversold mark. Also, the %K line of the stochastic oscillator created a negative cross with the %D line and is moving towards the oversold zone. The MACD oscillator lies below its trigger and zero line, suggesting further losses.
Currently, the price is developing slightly above the 13-month low of 0.7344 that hit on June 21. Immediate support below this level is being provided by the 0.7325 barrier, taken from the low on May 2017. Should prices dip lower again could open the way towards the 0.7160 hurdle, identified by the trough on December 2016.
In case of an upward attempt, the next resistance for investors to have in mind is the 0.7475 level, taken from the bottom on May 31. A jump above this level, the price could challenge the 20- and 40-simple moving averages (SMAs) around 0.7510. Slightly above this region the 23.6% Fibonacci retracement level of 0.7533 of the downleg from 0.8135 to 0.7325, could provide strong resistance for the bulls.
Overall, both the short- and medium-term outlooks are currently looking bearish, though caution is warranted in the near-term as there are signs of a possible new multi-month low. In addition, AUDUSD has been developing within a descending move since January 26.
