AUDUSD is making a corrective move lower after rising from 0.7328 to 0.7711. This pullback is not surprising after such a strong rally that brought the market to overbought conditions, as indicated by the RSI being at 70 at the end of June when the market peaked.
It remains to be seen whether this move lower is a temporary correction of the May 9 to June 30 uptrend. A sustained downside move is not expected and for now there is no indication of a change in this trend as long as RSI remains in bullish territory above 50 and while AUDUSD remains above its 200-day moving average.
MACD is above zero, in bullish territory. However, it is starting to plateau, suggesting a loss in upside momentum, giving another indication that the market seems to have peaked for now.
It is important to note that AUDUSD has not retraced more than 50% of its rise from 0.7328 to 0.7711 and so remaining above the 50% Fibonacci level at 0.7518 is helping maintain the short-term bullish market structure. A move below this level would bring into view support at the 61.8% and 78.6% Fibonacci levels at 0.7474 and 0.7410 before reaching 0.7328, which would result in a full reversal of the May 9 to June 30 uptrend.
Alternatively, any renewed upside would find immediate resistance at 0.7620 (23.6% Fibonacci) before retesting the June 30 peak at 0.7711. From here, there would be a resumption of the uptrend that started at 0.7328.
The horizontal alignment of the 50-day and 200-day moving averages suggests a potential neutral short-term outlook especially if prices remain trapped between 0.7320 and 0.7518. In the bigger picture, AUDUSD is also neutral and trading within a range of 0.7160 and 0.7760.
