AUDUSD keeps fighting for a decisive close above the 0.7500 level for the second consecutive week, despite setting a foothold near the 0.7460 number.
The recent fruitless bullish attempts suggest buying forces are fizzling out, with the MACD and the RSI somewhat endorsing that view as the former is rising at a relatively softer pace and the latter seems to be creating a lower high below its 70 overbought mark. Yet, as long as the indicators remain within the bullish territory, there is an opportunity for further improvement in the market.
A decisive close above the 0.7531, and more importantly, beyond the 200-day simple moving average (SMA), where the 50% Fibonacci retracement of the 0.8006 – 0.7105 downleg is resting, would pave the way towards the 0.7615 resistance from June 25. Should the rally gain fresh momentum, the next key resistance could emerge around the 61.8% Fibonacci of 0.7719.
In the negative scenario, where the floor between the 0.7460 mark and the 38.2% Fibonacci of 0.7450 collapses, the price could immediately find support around the 0.7400 number. Note the 20-day SMA is also converging to the same level, therefore any break lower from here could prompt steeper declines likely towards the 23.6% Fibonacci of 0.7317. If that’s the case, the broken descending trendline stretched from the 0.7890 peak may also attract special attention before traders target the lower supportive trendline currently seen around 0.7250.
All in all, AUDUSD still has the potential to make further progress in the short term unless the price dips back below 0.7460.