Technical Update on the Australian Dollar (AUD/USD) and Moving Averages.
The Australian Dollar is currently facing its most challenging month against the US Dollar since February. It has a decline of -4.5%. The trend for AUD/USD remains bearish, having experienced a continuous decline over five consecutive weeks, a pattern not observed since October 2022. Sustaining this trend for a sixth week would result in the lengthiest losing streak since February 2020. The impending 24 to 48 hours raise the question of which levels are critical to monitor closely.
Analyzing the technical landscape, the daily chart illustrates that the exchange rate has descended to the 78.6% Fibonacci retracement level at 0.6382. In the wake of this descent, price movements have encountered resistance in their attempts to drop further, leading to the establishment and reinforcement of a support level.
Technical Update- Australian Dollar and Averages
Additionally, the presence of a bearish Death Cross between the 20-day and 50-day Moving Averages remains notable. Should a reversal materialize, these lines could function as pivotal resistance points, thereby accentuating the focus on the downside in the short term. Should the downtrend persist, attention shifts to the November low of 0.6272, followed by the 2022 bottom of 0.6170.
The recent stability of the Australian Dollar is partly attributed to the short-term rising support that took form on August 17th. Concurrently, the 50-period and 100-period Moving Averages are gradually converging.
Presently, immediate resistance is defined by both the 100% Fibonacci extension level of 0.6466 and the 50-period line. A breach beyond these levels shifts focus to the 78.6% mark at 0.6525, in addition to the 100-period Moving Average. The latter has the potential to reinstate the prevailing downward technical inclination. Conversely, a decline beneath the 138.2% level at 0.6362 opens up the possibility of an extended decline toward the November low.
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