AUDUSD escapes bearish breakdown but bias weak
2023.06.01 06:57
bounced back above the nearby 0.6483 base, which has been buffering selling forces since the start of May, after a flash spike to a new six-month low of 0.6457 on Wednesday.
The rebound in the stochastic oscillator promotes an upside breakout or some stabilization, though stronger bullish signals are required to boost market sentiment. Moreover, the RSI is comfortably below its 50 neutral mark and the MACD remains negatively charged below its red signal line, both suggesting sellers have not abandoned their efforts yet. The negative slope in the simple moving averages (SMA) is another discouraging sign.
A decisive extension above the 0.6525-0.6565 zone and into the former range area could prompt an increase towards the 50% Fibonacci retracement of the 0.6169-0.7157 upleg at 0.6663. The 200-day SMA and the tentative resistance trendline at 0.6720 could be more important obstacles, a break of which may lift the price directly up to the 38.2% Fibonacci and the topside of the range at 0.6800.
Should the bears successfully breach the 0.6485 bar, they may forcefully squeeze the price towards the tentative ascending trendline drawn from the 2020 low at 0.6360. Another failure here could add more fuel to the sell-off, shifting the spotlight straight to the broken support line from August 2021 and the 0.6270-0.6255 constraining region.
In short, negative risks have not evaporated in the AUDUSD market, although a pause in the current bearish wave is likely. A clear close below 0.6483 may generate a more aggressive decline.
