AUD/USD still consolidates in a sideways channel; hovers near 0.7000.
AUD/USD has been struggling in a tight range over the last three months with upper boundary the 0.7200 psychological level and lower boundary the 0.7000 level. During the preceding week, the price tried to break lower, posting a new four-month low of 0.6987, but it failed once again to end the day below the consolidation area. Currently, the pair is trading below the 23.6% Fibonacci retracement level of the down leg from 0.8135 to 0.6746 around 0.7070 and the Ichimoku cloud, suggesting further bearish moves.
The short-term bias looks negative as the MACD keeps losing ground below its trigger line, while the RSI seems to be making its way up below the 50-neutral mark. Moreover, the price is capped by the 20- and 40-simple moving averages (SMA), which are ready to create a bearish cross.
The 0.7000 psychological level could be a trigger point for steeper bearish action and if there is a break of this significant line, investors could turn their attention on the 0.6825 support, taken from January 2016, turning the neutral outlook to bearish.
On the other hand, if the pair reverses back to the upside, immediate resistance is coming from the 23.6% Fibonacci of 0.7070 ahead of the lower surface of the Ichimoku cloud around 0.7100. If the price continues to rise, resistance could next be faced somewhere near the 0.7200 key level.
Overall, the decline over the last days did not change the neutral bias. Any drop below 0.7000 could resume the long-term bearish structure.
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