AUDUSD has been in a recovery mode since mid-October when its long-term downtrend hit a bottom at the 32-month low of 0.6169. However, the pair’s rebound appears to be fading as the price has been constantly held down by the 200-day simple moving average (SMA).
The momentum indicators currently suggest that bullish forces are subsiding but remain in charge. Specifically, the MACD histogram is holding above both zero and its red signal line, while the RSI is pointing downwards in the positive territory.
If the positive momentum strengthens and the price crosses above the 200-day SMA, the recent high of 0.6892 could prove to be the first resistance point. Piercing through that zone, the bulls might aim for 0.7008 before the spotlight turns to the August peak of 0.7136. Any further advances could then cease at the June high of 0.7282.
Alternatively, should the pair reverse lower, the recent support of 0.6687 could act as the first line of defense. Diving beneath that zone, the price might decline to test the December low of 0.6628. Should that floor collapse, the 0.6584 region may then provide downside protection.
Overall, AUDUSD seems to be in a consolidation mode as the 200-day SMA has repeatedly capped its upside. Therefore, a successful close above that crucial barrier could spark an upside rally.
