XM Group
AUDUSD has snagged around the 0.7100 handle, trading in between the Ichimoku lines, after the pair’s fresh bounce in the vicinity of three-month lows at 0.7029. The pair is finding difficulty to reach yesterday’s intraday high of 0.7147 despite the Reserve Bank of Australia’s larger interest rate hike earlier today, which kept the pair bid in the Asian session. That said, the bearish simple moving averages (SMAs) are endorsing the negative trajectory in the pair.
Currently, the Ichimoku lines indicate a pause in the negative forces, while the short-term oscillators are painting a conflicting picture in directional momentum. The MACD is strengthening over its red trigger line in the negative region, while the stochastic %K line has dipped back below the %D line, promoting growing downward momentum. Meanwhile, after a retest of the 50 level, the now neutral RSI is struggling to push clearly into the bullish zone.
If the 0.7100 hurdle obstructs gains in the pair and sellers steer the price visibly underneath the red Tenkan-sen line at 0.7086, the door could then open for a retest of the three-month trough of 0.7029. If the downward bearing is rekindled, the bears may target the 0.6963-0.6973 support band, formed by the mid-July 2020 lows and the January 28 trough. Should the descent endure, the price could seek out the key 0.6921 support base, shaped by multiple lows over the first half of July 2020. From here, a deeper move could then encounter downside friction within the 0.6900 and the 0.6876 support barriers.
Otherwise, if buyers re-emerge and drive the pair past the blue Kijun-sen line at 0.7110, they could then meet initial resistance at 0.7147. The path higher is paved with congested obstacles, starting with a resistance area linking the descending 50-period SMA at 0.7168 with the 0.7190 high, coinciding with the Ichimoku cloud’s lower band. Climbing further, the bulls may then face the 0.7228-0.7251 resistance band. Overstepping the cloud and approaching 100-period SMA, currently at 0.7289, buyers could aim for the 0.7342 border before attempting to challenge the 200-period SMA.
Summarizing, AUDUSD is sustaining a bearish bias beneath the falling SMAs and the 0.7190 high. That said, a climb in the price above the 0.7228-0.7251 resistance barrier could likely feed positive prospects.
Source: FXStreet – XM Group – Anthony Charalambous, CFTe
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