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.
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