AUDUSD is clearly in a downtrend since falling from the multi-year high of 0.8124 to the 0.7500 area. The crossover of the 50-day moving average below the 200-day MA highlights the bearish outlook.
Immediate downside pressure has eased and the market has moved out of oversold conditions, as both the RSI and stochastics have risen out of their respective extreme levels.
The psychological level at 0.7500 has proven to be a strong support level and AUDUSD has been trading above it since June. This support is expected to remain firm and limit further downside for now. If it fails to hold, then prices could extend lower to re-test the May 9 low at 0.7328.
Looking at the Fibonacci retracement level of the upleg from 0.7328 to 0.8124, the market needs to rise above the 61.8% Fibonacci (0.7631) to develop stronger upside momentum and this would open the way towards the 200-day MA (0.7690) and 50% Fibonacci (0.7725).
AUDUSD has stalled its downtrend for now and is neutral in the near term. But the pair remains vulnerable with no change in the bearish outlook unless it can reclaim the 0.7900 handle.
