AUD/USD shifts long-term positive structure to negative; hits an 11-month low.
AUD/USD has been heading sharply lower over the last couple of weeks, penetrating the long-term ascending trend line to the downside. The bullish picture shifted to bearish as there is a weekly session close below the significant diagonal line, which had been holding since January 2016. Since its deep fall, the price touched a fresh 11-month low of 0.7471 during yesterday’s trading day.
Looking at momentum indicators, in the daily timeframe, the RSI indicator is lacking direction near the oversold zone, suggesting that the market could keep consolidating in the near term. The MACD oscillator is moving lower in the negative territory with strong momentum.
Currently, the price is trading near the 50.0% Fibonacci retracement level of 0.7480 of the up-leg from 0.6820 to 0.8135, which is acting as significant support barrier. In the wake of negative pressures, the market could extend its losses towards the 0.7370 support hurdle. In case of steeper declines, the pair could breach this trough, diving to the 0.7325 level, which overlaps with the 61.8% Fibonacci mark.
On the flip side, a move to the upside could open the way to the 38.2% Fibonacci, which holds near the 0.7640 resistance level and the rising trend line. Also, the 20- and 40-simple moving averages are behaving as critical resistance levels near 0.7670 and 0.7700 respectively. A jump above these levels could open the way towards the 23.6% Fibonacci of 0.7825.
Overall, AUD/USD has been negative since peaking at a 32-month high of 0.8135. Near-term negative pressure is expected to remain as long as price action takes place below the uptrend line.
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