AUDUSD stretched sharply on the downside on Wednesday to unlock a two-month low of 0.7027 after sliding sideways the past three days. The technical picture has also turned more bearish as the MACD deepened further in negative territory and below its red signal line, while the RSI has increased its speed southwards. The latter however is not far from its 30 oversold level, a sign that losses may not last for long.
Should bearish action continue below the 0.70 mark, support could be found between the psychological levels of 0.69 and 0.68. A successful break lower, could then bring the almost 10-year low of 0.6745 back into view.
In case of a recovery, the 23.6% Fibonacci of 0.7074 of the upleg from 0.8135 to 0.6745 could provide nearby resistance ahead of the 0.7200 round level. Slightly higher at 0.7244, the 200-day moving average could challenge the bulls as it did at the end of January. If it fails to stop upside pressure, the next target could be the January peak of 0.7294.
In the medium-term, AUDUSD is stable in a neutral mode within the 0.70-0.7392 area. The flattening 50-day MA suggests that the sideways run may not change any time soon.
