AUDUSD is seeking fresh lows in the daily chart following the slump below its 20- and 50-day simple moving averages (SMAs).
The pair is currently trading at the lowest price in two months, testing the bottom of the Ichimoku cloud and a former key support/resistance area. But the RSI has yet to confirm oversold conditions although it is close to touch the 30 level. The MACD’s drop within the negative zone and the bearish cross between the red Tenkan-sen and blue Kijun-sen lines are a more worrying signal, indicating that the bears may dominate in the short-term.
A sustainable move below the cloud and the 0.7030 number may raise concerns that a downtrend is in progress, likely incentivizing a more aggressive sell-off towards the 0.6820 support region and the 200-day SMA (0.6759). The medium-term picture would also weaken from positive to neutral in this case. Retracing deeper, the price may find some footing around 0.6580.
Should the pair avoid an extension below the cloud, it may need to crawl back above the 0.7240 barrier, where the 20-day SMA is currently heading, in order to reach the previous high of 0.7344. Another step higher would expose the market to the 0.7412 peak and to the 0.7500 round level.
In brief, AUDUSD is currently providing discouraging short-term signals, with the pair expected to strengthen its downside correction below the cloud and the 0.7030 mark.
