AUDUSD is looking more bullish after completing an inverted hammer pattern on Tuesday – implying a reversal move – once it posted a new four-month low of 0.6680.
The strong sell-off started from the six-month high of 0.7030 but the technical indicators are suggesting a potential pullback in the short-term. The RSI is flattening after the jump back into the bearish territory from the oversold zone, while the rising stochastic oscillator completed a bullish cross exiting the oversold area.
A continuation of the upward rally would send prices towards the immediate resistance of the 23.6% Fibonacci retracement level of the down leg from 0.7030-0.6680 near 0.6755, which overlaps with the resistance, taken from the inside swing low of November 2019. More gains could see the 0.6800 handle and the 38.2% Fibo of 0.6808, while overhead the 20-day simple moving average (SMA) could also apply pressure.
If sellers take control and reverse back down the 0.6680 – 0.6670 support zone, which includes the ten-and-a-half year low, may prove a tough obstacle to overcome. A sharp selling interest from traders would open the door for the 0.6250 support, registered on February 2009, however, before this level – the psychological marks of 0.6600, 0.6500 – could attract attention.
Overall, AUDUSD has been gaining some ground over the last couple of days, but only a significant close above the 0.6935 resistance would endorse the bullish view in the short-term.
