Technical Analysis – AUDUSD in strong sell-off; ascending trend line eyed as support
|AUDUSD recorded relative strong bearish sessions in the previous week before the pull-back on the 0.7920 resistance level. The price plunged below the 0.7715 key level and posted a fresh three-month low of 0.7677. The bearish structure in the short-term remains intact, however, stochastics signal for a bullish correction.
In the daily timeframe, the MACD indicator is well below the zero and trigger lines and is falling, while the stochastic oscillator is creating a bullish crossover within the %K and %D line in the oversold zone, suggesting that the latest downswing may be running out of steam and that the risk for a continuation of the upward tendency is high.
In the wake of negative movements, the market could meet the immediate support at 38.2% Fibonacci retracement level near 0.7640 of the upleg with the low of 0.6820 to the high of 0.8135. This level stands near the medium-term ascending trend line, which has been holding since January 2016. A successful close below this area could increase chances for further losses until the 0.7500 handle and the trend would shift to bearish.
On the flip side, a move to the upside could see immediate resistance at the 20-day simple moving average (SMA) at 0.7788 but should the market push the price higher towards the 23.6% Fibonacci mark near 0.7830. A strong barrier, could be found at the 0.7920 resistance level taken from the high on March 14.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.