AUDUSD has been inching lower in the short-term, generating a structure of lower highs and lower lows. Although the pair made efforts to recoup some losses, it quickly retraced towards its multi-month lows as the 50-day simple moving average (SMA) capped upside moves.
The momentum indicators currently suggest that near-term risks are tilted to the downside. Specifically, the RSI is flatlining beneath its 50-neutral threshold, while the stochastic oscillator is descending near the oversold zone.
Should the negative momentum strengthen, the price could initially test the recent low of 0.6698. Sliding beneath that floor, the 27-month low of 0.6680 might come under examination. Failing to halt there, the price may decline to form fresh multi-year lows, where the April 2020 resistance zone of 0.6570 could reject any further declines.
On the flipside, bullish actions could propel the price towards the recent support region of 0.6856. A break above the latter could open the door for the recent peak of 0.6913 before the spotlight turns to 0.7010. Even higher, the price advance may cease at the August high of 0.7136.
Overall, even though AUDUSD is pushing for some recovery, the pair seems unable to edge higher and escape its recent lows. Therefore, a break above the 50-day SMA is needed to revive bulls’ hopes for a sustained rebound.
