AUD/USD Remains Above Downtrend Line but With Weak Momentum

11/17/2022

1 minute read

2022.11.17 08:13

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is still standing above the long-term downtrend line; however, the momentum is too weak to sustain the bullish movement that started after the bounce off the 0.6270 support level.

The MACD oscillator is strengthening the positive move above its trigger and zero lines, suggesting more gains, but, on the other hand, the RSI is sloping marginally down after several failed attempts to climb into the overbought region. In trend indicators, the 20- and 50-day simple moving averages (SMAs) created a bullish crossover, confirming the upside structure.

In the wake of negative pressures, the market could meet support at the 0.6680 barrier before it heads lower to the Ichimoku cloud and the 0.6520 support. A successful close below this level could see a retest of the SMAs at 0.6490, while in case of steeper declines, the pair could breach this region, diving to the 0.6270 mark.

On the flip side, a move to the upside could see immediate resistance at the 0.6920 level ahead of the 200-day SMA at 0.6940. Even higher, the 0.7010 line could be a strong obstacle as it could be the sign for switching the outlook to bullish.

Turning to the short-term picture, the market seems to be in bullish mode given that the pair trades above the downtrend line. In the bigger picture, a break above the 200-day SMA is expected to endorse the near-term outlook.