From last two weeks, AUDUSD -0.46% trend has been tumbling ever since bearish engulfing and doji patterns have occurred at 0.7646 and 0.7677 levels (refer daily chart ).
The failure swings were observed at the stiff resistance of 0.7718 levels, these failure swings have resulted in price drops again.
For now, the current price is testing strong support at 0.7575 levels, upon breach below this level, we foresee more slumps as both leading as well as indicators signal weakness in this pair. 7DMA crosses below 21DMA which is a bearish crossover, while MACD shows bearish crossover sliding below zero level which is a bearish trajectory. RSI and stochastic curves evidence downward convergence to indicate selling interests.
On a broader perspective, it was also stated in our previous post that the major trend breaching long lasting range and sloping channel in the consolidation phase (refer monthly chart), and it was stated that “we get a little scepticism on further rallies as we trace out shooting star formation in last month’s candle (refer monthly charts), the major trend is bearish biased”. Consequently, bears have managed to show their effects by evidencing price dips upon the formation of this bearish pattern (refer monthly chart).
Both leading oscillators ( RSI & stochastic ) on this timeframe, indicate overbought pressures.
Hence, contemplating above technical rationale, at spot reference: 0.7571, upon breach below 0.7575, the intraday speculators can easily eye on minimum southward targets upto 30-40 pips, thus, snap rallies and deploy tunnel spreads using upper strikes at 0.7608 and lower strikes at 0.7535.
Currency Strength Index: FxWirePro's hourly AUD spot index has shown -92 (which is bearish ), while hourly USD spot index was at -10 (neutral) while articulating at 06:14 GMT .
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