AUDUSD – bears may pause for consolidation, daily cloud top to cap upticks
AUD/USD remains in the red for the eighth consecutive day, hitting a six-week low early Wednesday.
The Australian dollar is under increased pressure from a stronger US dollar, falling commodity prices, and concerns about China’s economic growth.
Bears breached pivotal support at 0.6580 (200DMA / 50% retracement of 0.6362/0.6798) following Tuesday’s close below the 38.2% Fibonacci retracement and a break below the 100DMA in early Wednesday trading.
The price is currently holding in the middle of a thick daily Ichimoku cloud, with the formation of a daily Tenkan / Kijun-sen bear cross adding to the bearish near-term outlook.
However, strongly oversold conditions suggest that bears may pause for consolidation, with the 200DMA acting as resistance and containing price action for now.
Corrective upticks should be capped below the cloud top (0.6642) to maintain the bearish trend and offer better selling opportunities for a fresh push lower, targeting 0.6538/28 (daily cloud base / 61.8% Fibonacci retracement).
Resistance levels: 0.6607; 0.6631; 0.6642; 0.6663
Support levels: 0.6580; 0.6538; 0.6528; 0.6465
