The AUDUSD holds in red for the second day, following strong upside rejection on Wednesday, when bulls stalled after failing to sustain break above psychological 0.70 barrier and capped by 200WMA/weekly cloud base.
The pair came under additional pressure on Thursday, following weak Australian labor data which showed unexpected and strong decline in employment.
Fresh extension of the pullback from 0.7063 (Wednesday’s spike high) adds to signals of a bull-trap above 0.70 barrier and warning of deeper pullback.
Rapid loss of bullish momentum on daily chart and south-heading RSI / stochastic, contribute to idea of deeper correction, though more evidence will be needed to confirm such scenario.
Bears eye initial support at 0.6852 (Fibo 23.6% of larger 0.6170/0.7063 recovery leg) and 200DMA (0.6819) break of which would add to bearish near-term outlook and risk further easing.
Psychological 0.70 level proved to be solid resistance and near-term bias is expected to remain with bears as long as the price action stays below.
Only violation of 200WMA/weekly cloud base would bring bulls fully in play for continuation of recovery leg from 0.6170 (Oct 13 low).
Res: 0.6915; 0.7000; 0.7076; 0.7091.
Sup: 0.6852; 0.6819; 0.6758; 0.6722.
