AUD/USD creates weak movement; still below the descending trend line.
AUD/USD remains under pressure and risk is still to the downside as prices continue to drift lower in the long-term timeframe. The short-term picture shows signs for some weakness as the price has been developing within a sideways channel over the last month. It is worth mentioning that the price recorded a fresh 32-month low of 0.7020 over the preceding week but failed to end the day near this level.
Having a look at the technical indicators, in the daily timeframe, the RSI indicator stands slightly below the threshold of 50 and is sloping to the downside. Moreover, the blue %K line of the stochastic oscillator is ready to post a bearish crossover with the red %D line in the middle area. Both indicators are suggesting neutral to bearish moves in the next few sessions.
Further losses could find immediate support at the 0.7020 level, achieved on October 26. If the latter fails to halt bearish movements, the next target could be the 0.7000 round figure, identified by the bottom on February 2016. A sharp bearish rally below this hurdle could open the door for the 0.6830 support, reached on January 2016.
On the flip side, the price could attempt to retouch the falling trend line, which is just above the 40-SMA and near the 0.7160 resistance level. Should traders continue to buy the pair above that significant obstacle, shifting the long-term downtrend to a more neutral one, resistance could then run towards the 0.7300 handle, which holds around the 23.6% Fibonacci retracement level of the down-leg from 0.8135 to 0.7040.
To sum up, AUD/USD remains in a descending movement over the last nine months after the pullback on the 0.8135 level and has failed to create a noteworthy bullish retracement.
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