AUDUSD has fully reversed October’s rise, with the price extending its decline marginally below the 0.7200 level and near the swing low of 0.7169 on Wednesday.
The area overlaps with the broken descending trendline, which could switch roles from resistance to support in order to boost the pair up to the ascending trendline and the red Tenkan-sen, both currently around 0.7272. A steeper rebound could meet the 20- and 50-day simple moving averages (SMAs) near the 23.6% Fibonacci retracement of the 0.8006 – 0.7105 downleg at 0.7317, while another step higher from here, could see an acceleration towards the 38.2% Fibonacci of 0.7450.
The RSI and the Stochastics are backing the above positive scenario since the indicators look set to depart from oversold levels. Yet, the negative momentum in the MACD suggests the bears could remain in charge for a bit longer.
If the pair retreats below 0.7169, the way would clear towards the August low of 0.7105. A break below that floor could stretch the 2021 downtrend to 0.6990 taken from the November 2020 low.
Summarizing, AUDUSD is looking cautiously bearish in the short-term picture. Failure to hold above 0.7169 could bring the broader downtrend back under the spotlight.