AUDUSD has been in a strong bearish rollercoaster over the last ten days, flirting with the 17-year low beneath the strong psychological mark of 0.6000. The pair has also increased distance below its negatively sloped moving average lines and the flattening Ichimoku cloud, indicating that the recent downtrend might hold for longer.
Momentum signals are bearish as is the red Tenkan-sen line, which is below the blue Kijun-sen line, and looks to be heading south, while the RSI is still moving in the oversold territory over the past week. However, this downfall below the 30 level is signaling that this might come to an end. The MACD is extending its losing momentum beneath its trigger and zero lines.
Additional declines may drive the price towards yesterday’s 17-month trough of 0.5958 before slipping to the critical level of the inside swing high of 0.5800, registered on July 2002. Below the latter, the 0.5400 handle – achieved on August 2001- is coming next.
In case the pair changes its direction to the upside, the bulls will probably challenge the 23.6% Fibonacci retracement level of the down leg from 0.7030 to 0.5958 at 0.6210. A break higher could last until the 0.6310 resistance and the 38.2% Fibonacci of 0.6370. Further up, the area around the 20-day simple moving average (SMA) of 0.6435 could be another potential obstacle for upward movements.
In brief, in the short-term window, the pair switched to a strongly negative mode after the rally off 0.7030, while in the bigger picture, AUDUSD has been retaining the downward trend since July 2011.
