AUDUSD recorded a stunning bearish rally over the last four trading days, penetrating the medium-term ascending trend line, which has been standing since January 2016. Also, the price posted a fresh more than 4-month low of 0.7569 during today’s early European session. The aggressive bearish correction started after the pullback on the 32-month high of 0.8135 and now the bias is turning to negative.
The RSI is currently increasing negative momentum towards the oversold threshold of 30 after the sharp slip from the 50 level, while the MACD is falling in negative territory, both hinting that the next move in prices could be on the downside.
Should the market extend losses, support could be met at the 0.7500 strong psychological level, taken from the low on December 2017. This level is holding slightly above the 50.0% Fibonacci retracement level of the upleg from 0.6820 to 0.8135. A significant drop below this area could send prices towards the 0.7370 support taken from the June 2017 low.
On the flip side, if the pair bounces up, immediate resistance could be met at the 38.2% Fibonacci around 0.7640. If the market manages to pick up speed prices could re-challenge the 23.6% Fibonacci mark of 0.7825, reversing this and last week’s sell-off.
