Bears brace for 0.7200 at three-week low

  • AUD/USD holds lower ground near monthly low, prints three-day downtrend.
  • Sustained trading below 200-DMA, descending RSI, not oversold, back the bears.
  • 78.6% Fibonacci retracement can trigger corrective pullback, two-month-old hurdle guards recovery moves.

AUD/USD remains pressured around the monthly low of 0.7226, down 0.68% intraday ahead of Monday’s European session.

In doing so, the Aussie pair extends Friday’s downside break of one-month-old horizontal support, now resistance, amid a bearish RSI line.

Given the absence of oversold RSI, AUD/USD prices can continue extending the south-run towards the 0.7200 threshold, comprising 78.6% Fibonacci retracement level of November 2020 to February 2021 upside.

It should be noted, however, that any further downside past 0.7200 may be challenged by the RSI conditions, likely to turn oversold around then, if not then the yearly low near 0.7105 and a descending support line from April close to 0.7015 will be in focus.

Meanwhile, the corrective pullback will be ignored unless crossing a horizontal area comprising July’s low, surrounding 0.7290.

Even so, 50-DMA and 61.8% Fibonacci retracement levels, respectively around 0.7340 and 0.7340, challenge the AUD/USD bulls.

AUD/USD: Daily chart

Trend: Further weakness expected

 

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