The AUD USD is Now in a Weak Scenario
AUDUSD has been stuck in a tight range, failing to recover from Tuesday's drop to 0.6579, and this has pushed the pair back into the red zone every week.
The steep shorting occurred following a significant rejection near the falling trendline formed in May 2021, yet an upside reversal is possible as the RSI and stochastic oscillator are now flirting with oversold levels. Nonetheless, as long as the indications remain negative, downward corrections are more likely than positive corrections in future sessions.
The MACD stays in the negative territory, and the 20-day simple moving average (SMA) is likely to cross below the 200-day SMA after falling below the 50-day SMA.
Another negative correction might highlight the major area of 0.6520, which prompted the increase to 0.7157. A break below that level, where the 23.6% Fibonacci retracement of the 0.7660-0.6169 decline is also located, might push the market towards the two August 2021 support trendlines at 0.6460 and 0.6368, respectively. If the latter fails, the selloff might accelerate to 0.6270.
On the plus side, the 0.6630 area has been limiting bullish moves over the last two days. As a result, a rise above that zone might bring the price to the 38.2% Fibonacci level of 0.6740. The 20- and 200-day simple moving averages may act as a ceiling, blocking a move to the 0.6860 level. The next goal might be the 50% Fibonacci level of 0.6914.
Overall, the AUDUSD has not avoided the recent bearish trend, with more losses to 0.6520 expected. Yet, given that the price is now trading toward the oversold territory, an upward correction cannot be ruled out.