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).