- AUD/USD in the hands of the bears while below the critical structure.
- Bears remain committed and a test of the daily support structure could be on the cards.
0.7005 remains the line in the sand according to the daily chart and the following prior analysis:
The chart above was the analysis given at the start of the week forecasting the current price action of today:
The initial drop that has been eclipsed in the above chart represents a buying opportunity if the bears take in their profits.
However, as illustrated in the above chart, there is no way of telling if the bulls are about to throw in the towel, so the 4-hour time frame is an appropriate place to monitor for price action and change of environment.
As it stands though, within a bearish environment, (price below 21-moving average, MACD below zero), the price has moved up to test the old support now turned resistance level.
If this structure holds, then a break of the daily support at 0.7005 makes a plausible case for a downside continuation.
In such a scenario, it would be expected that the market would complete a move to 0.6950 ahead of a 38.2% Fibonacci retracement of the monthly bullish impulse around 0.6680.
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