AUDUSD slid to a 7-week low of 0.7582 on Wednesday and has since been struggling to reclaim the 0.76 level. The momentum indicators are displaying mixed messages. The RSI has flatlined below the 50 level, suggesting the selling pressure is easing. But the stochastics are still pointing down; although being so deep in negative territory, it may only be a matter of time before they reverse higher.
The pair is attempting to make a positive turn today and should the short-term picture improve meaningfully, the price may soon surpass the 38.2% Fibonacci retracement of the November 2020-February 2021 uptrend at 0.7618. Such a move should be enough to generate enough positive momentum for the pair to make a dash for the key 0.77 handle. Higher up, there could be a much bigger test for the bulls at the intersection zone of the 20- and 50-day moving averages (MA) around 0.7730.
A climb above the MAs would help switch the near-term bias to neutral, whereas for the pair to restore its bullish momentum, it would need to stretch its rebound above the 23.6% Fibonacci of 0.7767 and towards the resistance area around 0.7840 that prevented advances several times over the last month.
However, if the bears stand their ground as the 20-day MA completes its bearish cross with the 50-day MA, AUDUSD could easily beat the February trough of 0.7563 and head towards the 50% Fibonacci of 0.7498. A break below the 50% Fibonacci would pave the way for the 200-day MA at 0.7370, shifting the medium-term outlook to bearish.
To sum up, AUDUSD is in danger of seeing its longer-term bullish structure being eroded. However, the possibility of a near-term rebound shouldn’t be ruled out. Yet, only a rise above February’s 3-year top of 0.8006 would safeguard the longer-run uptrend, which is some distant away from the current price action.
