- AUDUSD loses 4% from 0.6797
- Prices currently recover somewhat above the 20-period SMA
- Stochastics enter overbought region
AUDUSD has been moving sideways since July 25, following a decline below the 23.6% Fibonacci retracement level of the down leg from 0.6797 to 0.6512 at 0.6580 in the 4-hour chart. The pair has lost more than 4% over the last two weeks; however, the technical oscillators are indicating an upside move. The stochastic is heading towards the overbought area, while the RSI is moving horizontally slightly beneath the neutral threshold of 50.
If there are more increases, the immediate resistance area could be 0.6570, followed by the 23.6% Fibonacci of 0.6580. Even higher, the 50-period simple moving average (SMA) at 0.6610 may act as a significant obstacle to surpass.
In the negative scenario, a drop back beneath the 20-period SMA could take the bears towards the previous lows of 0.6523 and 0.6512. A tumble lower could lead investors to the May 1 bottom at 0.6465.
All in all, AUDUSD is looking neutral in the short term following the aggressive selling interest at 0.6797. A successful rally above the 200-period SMA could switch the outlook to positive.
Source by: XM Global