AUD/USD Forecast: Long-term bear revival seen below 0.76
|The pullback in the Aussie dollar from the recent high of 0.8136 to 0.7750 has neutralized the bullish outlook. That said, only a monthly close below 0.7614 would signal a continuation of the sell-off from the 2011 high of 1.1080, technical charts indicate.
Monthly chart
- The above chart shows an inverted (bear) flag pattern. A close below the flag support of 0.7614 would revive the bearish trend.
- The relative strength index (RSI) and the MACD are biased neutral.
- The 50-month moving average (MA) is biased bearish and was last seen at 0.7869.
Daily chart
- The chart shows a falling tops pattern as indicated by the descending trendline.
- The 5-day MA, 10-day MA are trending lower - indicate a bearish setup. The RSI also favors the bears.
- However, the pair is defending the support at 0.7744 - 61.8% Fib retracement.
Bullish scenario
Rebound from the 61.8 percent Fib support and a close above the upward sloping (biased bullish) monthly 10-MA of 0.7805 would open doors for a test of supply around the descending trendline resistance around 0.7860.
A daily close above the trendline hurdle would signal a temporary low has been made around 61.8% Fib and could yield a re-test of 0.7989 (Feb. 16 high). Suh moves are more likely if RBA sounds hawkish (tomorrow) and fears of trade wars recede.
Bearish scenario
- A daily close below 0.7744 - 61.8% Fib would risk extension of the decline to 0.7614 (flag support on the monthly).
- A convincing move below 0.76 would revive the sell-off from the 2011 high of 1.1080 and allow for a deeper sell-off to 0.70 (psychological support) and 0.6827 (2016 low).
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