AUDUSD is recovering some of Monday’s losses as it plummeted towards an eleven-year trough of 0.6310 but reversed quickly higher.
Currently, the pair is trading near the 0.6500 psychological mark and the flattening red Tenkan-sen line. The RSI indicator is sloping marginally up in the negative territory, suggesting a possible upside correction, while the MACD oscillator is flirting with the trigger line in the bearish zone. Moreover, the 20- and 40-day simple moving averages (SMAs) are acting as strong resistances for the pair as they are still moving lower.
In case of upside pressure, the pair could meet the 38.2% Fibonacci retracement level of the down leg from 0.7030 to 0.6310 at 0.6585 and the 20-day SMA at 0.6600. A successfully climb above this line could open the way for the 0.6660 resistance and the 50.0% Fibonacci of 0.6670, which stands near the 40-day SMA.
Once again, a risk to the downside, could drive prices to the eleven-year low of 0.6310 ahead of the 0.6235 bottom, registered on 2009. Sharper declines could send the market to the 0.6000 critical level, taken from the negative spike on 2008.
Summarizing, the pair has been developing in a descending channel over the last two-and-a-half-months and only a daily close above 0.6800 could shift the outlook from negative to neutral.
