AUD/USD retreats and could weaken further in the short-term.
AUD/USD has come under renewed selling pressure, falling back below the 20- and 40-simple moving averages (SMAs) in the daily timeframe, following the pullback on the 0.7300 resistance level. The technical indicators are suggesting that further declines may be on cards in the short-term. The RSI is below its neutral 50 line, detecting negative momentum, and is also pointing downwards. The MACD, already negative, lies below its trigger line.
Should the downside tendency continue, support will likely come from the 31-month low of 0.7084, identified by the trough on September 11. A drop below this level would reinforce the downside risk and send prices until the 0.7000 level, creating a lower low in the downward trend.
However, if there are further positive pressures, a penetration of the diagonal line to the upside would shift the longer-term bearish view to a more neutral one, driving the price until the 0.7300 and then at the 0.7380 resistance levels. More advances could open the way towards the 0.7475 level, taken from the high on July 10.
To summarise, AUD/USD’s outlook remains negative since prices hold below all the moving average lines and failed to penetrate to the upside the falling trend line, which has been holding since January 26.
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