Technical Analysis – AUDUSD risk tilted to the downside; holds below 23.6% Fibonacci mark
February 28, 2018 8:26 am
AUDUSD retreats over the last couple of sessions and risk is still to a bearish correction as price continues to drift lower from the 0.7990 resistance level. The price posted a pullback on the 20-day simple moving average on Monday and slipped below the 23.6% Fibonacci retracement at 0.7826 level of the upleg from 0.6820 to 0.8135. Price action is at the moment taking place not far below this area.
Momentum indicators are pointing to a negative bias in the short-term with the MACD just below the zero line and the stochastic oscillator deep in bearish territory. However, the stochastic is ready to reach the oversold area and the %K line is attempting a bearish cross with the %D line, suggesting further downside pressure to come.
Further losses should see the 0.7730 – 0.7755 area, which is acting as a major support. If prices fell below the aforementioned zone, it would reinforce the bearish structure in the medium-term and open the way towards the next key support level of 38.2% Fibonacci mark at 0.7635.
In the event of an upside reversal, the 23.6% Fibonacci level could act as a barrier before being able to re-challenge the 40-day SMA near 0.7917 at the time of writing. A break above this level could shift the outlook to a more bullish one as it could take the pair towards the 0.7990 resistance level.
It is worth mentioning that AUDUSD has been holding within an ascending move since January 2016 and tested several times the uptrend line.
AUDUSD retreats over the last couple of sessions and risk is still to a bearish correction as price continues to drift lower from the 0.7990 resistance level. The price posted a pullback on the 20-day simple moving average on Monday and slipped below the 23.6% Fibonacci retracement at 0.7826 level of the upleg from 0.6820 to 0.8135. Price action is at the moment taking place not far below this area.
Momentum indicators are pointing to a negative bias in the short-term with the MACD just below the zero line and the stochastic oscillator deep in bearish territory. However, the stochastic is ready to reach the oversold area and the %K line is attempting a bearish cross with the %D line, suggesting further downside pressure to come.
Further losses should see the 0.7730 – 0.7755 area, which is acting as a major support. If prices fell below the aforementioned zone, it would reinforce the bearish structure in the medium-term and open the way towards the next key support level of 38.2% Fibonacci mark at 0.7635.
In the event of an upside reversal, the 23.6% Fibonacci level could act as a barrier before being able to re-challenge the 40-day SMA near 0.7917 at the time of writing. A break above this level could shift the outlook to a more bullish one as it could take the pair towards the 0.7990 resistance level.
It is worth mentioning that AUDUSD has been holding within an ascending move since January 2016 and tested several times the uptrend line.
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