HomeContributorsTechnical AnalysisAUDUSD Wipes Out October's Gains, Bias Cautiously Bearish

AUDUSD Wipes Out October’s Gains, Bias Cautiously Bearish

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.

XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading