- The AUD/USD pair held on to its weaker tone through the mid-European session, albeit managed to find some support near 50% Fibonacci retracement level of the 0.6862-0.7022 recent positive move.
- However, the fact that the pair is holding well below 38.2% Fibo. level and 200-hour SMA confluence region, the set-up remains tilted in favour of bearish traders and support prospects for further downside.
Meanwhile, technical indicators on hourly charts maintained their bearish bias and have again started gaining negative traction on the daily chart, further reinforcing the bearish outlook and pave the way for an extension of the recent rejection slide from the key 0.70 psychological mark.
Sustained weakness below the 0.6940 region (50% Fibo. level) will reaffirm a near-term bearish breakdown and set the stage for a retest of the 0.6900 handle. A follow-through selling has the potential to drag the pair further towards multi-month lows, around the 0.6970-65 region.
On the flip side, the mentioned confluence support breakpoint, around the 0.6960-70 region, now seems to act as an immediate resistance, above which the pair is likely to make a fresh attempt towards conquering the 0.70 handle and test last week’s swing high level of 0.7022.
AUD/USD 1-hourly chart