Technical analysis: AUD/USD’s bullish improvement under question

AUDUSD’s three-week upside momentum seems to be fading ahead of the 200-day simple moving average (SMA). The negative bearing of the 50- and 100-day SMAs has softened, as has the bullish tone of the 200-day SMA. Overall, the SMAs are not demonstrating a definitive price trend, signalling a more neutral price trajectory.

The climbing Ichimoku lines have yet to confirm a dampening in bullish forces, while the short-term oscillators’ conflicting signals are hinting at some easing in positive momentum. The MACD is some distance above the zero mark and is improving over its red trigger line. However, the downward pointing RSI is struggling to push higher into overbought territory and the entangled stochastic lines are hovering just north of the 80 level, both conveying a pause in positive impetus.

If the 200-day SMA curbs the positive outlook, initial downside hindrance could commence around the 0.7468 barrier (previous resistance-now-support). If buyers’ positive drive abates further, the price may retreat towards the support region of 0.7378-0.7409, where the red Tenkan-sen line also currently resides. If this border breaks down, the neighbouring blue Kijun-sen line beneath could delay the test of a support zone involving the 50-day SMA at 0.7314 and the slender shaped Ichimoku cloud until 0.7282. If selling interest persists, the price may then target the 0.7225 low and 0.7169 trough.

If buyers regroup and manage to steer the price higher, preliminary resistance could emanate from the 200-day SMA at 0.7560. Successfully extending above it, upside progress may be challenged by the nearby resistance barricade of 0.7589-0.7645, which began developing in April 2021. Should buyers pilot beyond this obstacle, they could turn their focus to a region of highs, existing between the 0.7763 and 0.7819 barriers.

Summarizing, although AUDUSD is exhibiting a neutral-to-bullish tone in the short-term timeframe, it appears shaky. A jump above the 200-day SMA and past the 0.7645 obstacle could boost buyers’ confidence, while a dive below 0.7169 would start to feed negative tendencies.