AUDUSD is still in a clear downtrend in the four-hour chart despite the latest reflection near the November 2020 low of 0.6990, with the falling simple moving averages (SMAs) endorsing the bearish trajectory in the market.
That said, the positive momentum in the RSI and the Stochastics, and the recovery in the MACD, which is set to cross back above its red signal line, are pointing to additional bullish actions in the coming sessions. If that is the case, a decisive close above the 0.7070 barrier and the 20-period SMA could boost the price towards the crucial resistance trendline at 0.7126, where the 50-period SMA and the 23.6% Fibonacci retracement of the 0.7554 – 0.6990 down leg are also positioned. Breaking that wall, the bulls may speed up to the swing high of 0.7172, while not far above, the 38.2% Fibonacci of 0.7207 could immediately apply downside pressures if buying forces persist.
In the event sellers drive the price below 0.6990, the pair could mark a new lower low around the 0.6900 psychological mark. Lower, the bears may attempt to breach the 0.6830 – 0.6800 floor last seen in the second half of 2020.
Summarizing, AUDUSD is expected to pare some of its previous losses in the short-term, although the negative trend in the market may remain intact. A sustainable move above 0.7120 would eliminate downside risks.
In fundamentals, the Reserve Bank of Australia is meeting on Tuesday at 03:30 GMT to review its policy settings.