AUDUSD is turning bearish this week after shifting from a consolidation phase around the key 0.8000 level. After a brief pause, downward momentum resumed once the pair broke below the 50-day moving average at 0.7947. The medium-term bullish trend from May to September is at risk should prices extend lower.
The short-term bias is now bearish based on the RSI dropping below 50 and thereby giving a bearish signal. The first target is the mid-August low at 0.7807. Failure to recover at this support level would increase downward pressure and see prices move towards the 50% Fibonacci retracement level of the uptrend from 0.7328 to 0.8124. This level at 0.7725 is a pivotal level and should AUDUSD break below it then the uptrend from May to September will start to see a reversal and would indicate the medium term bullish trend has ended.
Looking to the upside, there is a resistance area formed by the 23.6% Fibonacci retracement level and the 50-day MA between 0.7934 and 0.7947. A sustained break above these barriers would turn the focus back to the upside. The key psychological level at 0.8000 needs to be broken to see a re-test of the 0.8124 peak, which was the highest level since May 2015. Above this top, AUDUSD would resume the May to September uptrend towards the previous major high at 0.8162 and 0.8294.
A short-term bearish bias is taking shape now but the uptrend from May to September is still intact and the 50-day and 200-day moving averages are still positively aligned. The MACD is still in bullish territory above zero.
