AUD/USD is regaining some losses after the violent sell-off towards the four-month low of 0.6864 in the prior week, sending prices above the red Tenkan-sen line and the 23.6% Fibonacci retracement level of the downfall from 0.7390 to 0.6746.
The RSI is currently increasing positive momentum towards its neutral threshold of 50 after an exit from overbought levels, while the MACD is heading north in negative territory, both hinting that the next move in prices could be on the upside rather than on the downside in the short-term.
If the price closes comfortably above the 20-day moving average, traders could add more buying pressure to the pair, pushing the market up to 0.6960. If this proves easy to overcome this time, the increase may next pause somewhere between the 38.2% Fibonacci of 0.6990 and the 40-SMA currently at 0.7020.
In the negative scenario, the price could return lower and touch the 23.6% Fibonacci of 0.6900, ahead of the four-month low of 0.6864. Marginally below this line, the 0.6825 support level, where it bottomed in January 2016, could come into focus, before slipping towards the ten-year low of 0.6746.
Summing up, AUD/USD is in bullish correction mode in the very short-term, however, looking at the bigger picture, the pair has been developing in a descending movement since December 2018. Investors should look for a break beneath 0.6864 for fresh bearish signals.
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