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Technical Analysis – AUDUSD in green again but bearish sentiment lingers
October 5, 2023 1:27 pmVideo
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AUDUSD in the green again today, trading above the early September trough
Bulls defended the March 10, 2023 descending trendline
Current upleg does not enjoy the support of momentum indicators
AUDUSD is recording its second straight green candle as the bulls are trying to stage a comeback. They have successfully defended the March 10, 2013 downward sloping trendline, but AUDUSD remains just a tad above its 2023 low. All eyes are now on the momentum indicators for clues on the next likely leg in AUDUSD.
In more detail, the RSI continues to hover below its 50-midpoint and thus confirms the presence of bearish pressure. More interestingly, the stochastic oscillator is currently battling with its moving average (MA). It has been edging lower and repeatedly failing to break above its MA. On the other hand, the Average Directional Movement Index (ADX) seems uninterested in the recent price action and is still stuck below its 25-threshold.
Should the bulls feel ready for a proper pullback, they would try to overcome the September 6, 2023 low at 0.6356 and then test the resistance set by the 0.6451-0.6458 range, which is populated by the May 31, 2023 low and the 50-day simple moving average (SMA). Even higher, the bulls could have a go at breaking above the 0.6521-0.6561 region. This is defined by the 23.6% Fibonacci retracement level of the April 5, 2022 – October 13, 2022 downtrend and the recent rectangle’s lower boundary.
On the flip side, the bears probably want to avoid the continuation of the current bullish reaction. They look determined to keep AUDUSD below the September 6, 2023 low at 0.6356, and then possibly set sail for the November 3, 2022 low at 0.6271. Their main target most likely remains the October 13, 2022 low at 0.6170.
To sum up, AUDUSD bears are probably taking a breather and plotting their move since the most momentum indicators remain on their side.
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