AUDUSD continues its downward trajectory and is hovering at its lowest levels in more than 5 months. The outlook has turned increasingly bearish after the market broke below the 200-day moving average.
The recent bounce off 0.7531 (November 21 low) was capped at the 61.8% Fibonacci retracement level (0.7630) of the 0.7328 – 0.8124 rise. Breaking above this level would ease immediate downside pressure but prices would meet a resistance zone between 0.7693 – 0.7724 (200-day MA and 50% Fibonacci). Only a rise above 0.7900 would indicate the bearish phase has ended. Clearing the 0.8124 peak would see a resumption of the uptrend from May.
Failure to break above 0.7630 in the near term would keep downside momentum in play with scope to target 0.7460 before re-visiting the 0.7328 low and consequently erasing the May – September uptrend. Such a move would confirm the start of a new medium-term downtrend.
Technicals are pointing to a bearish bias. The RSI is below 50. The 50-day MA is falling and there is risk of an imminent bearish crossover with the 200-day MA.
