AUDUSD sank to a three-week low of 0.6596 on Wednesday as the bulls could not find enough buyers to jump above the 200-day simple moving average (SMA) at 0.6690.
The pair is marking its second negative week, having trimmed more than half of June’s bull run to 0.6898.
Downside pressures could persist in the coming sessions as the technical indicators continue to slope southwards. The falling RSI has yet to reach its 30 oversold level, while the MACD remains negatively charged below its red signal line. That said, the stochastic oscillator has flattened near its previous lows, suggesting selling interest could fade soon.
The lower Bollinger band could prompt some consolidation within the 0.6565-0.6550 region, where the price faced limitations several times from the end of 2022 onwards. Failure to pivot here could direct the market back to May’s lows registered within the 0.6485- 0.6457 zone. A decisive close lower could stretch the February-May downtrend towards the 2020 support trendline seen around 0.6385.
On the upside, the 61.8% Fibonacci retracement of June’s bullish wave is currently capping the price around 0.6625. The resistance trendline is within short distance too, while the 50- and 200-day simple moving averages (SMAs) could be more challenging, cementing again the ceiling around the 50% Fibonacci mark and the 0.6690 bar. If the bulls breach that wall this time, the recovery could pick up steam towards the upper Bollinger band and the 38.2% Fibonacci of 0.6730. Then, another notable increase could take place, lifting the price up to the 23.6% Fibonacci of 0.6795.
In brief, the short-term risk for AUDUSD remains skewed to the downside, with support expected to develop within the 0.6565-0.6550 area.
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