AUDUSD rebound remains unreal below 0.6780
Despite falling heavily after the US inflation, the AUDUSD bounced off a two-month-old support line as nearly oversold RSI pushed back the bears. The recovery, however, remains below a two-week-old horizontal hurdle surrounding 0.6770-80, which in turn joins bearish MACD signals to challenge the optimists. If the Aussie pair crosses the 0.6780 hurdle, it can quickly run up towards the 61.8% Fibonacci retracement level of July-August upside, around 0.6855. Following that, a convergence of the 200-SMA and a downward sloping resistance line from mid-August, close to 0.6910, appears a tough nut to crack for the bulls.
Meanwhile, a clear downside below the aforementioned two-month-long support line, at 0.6700 by the press time, won’t hesitate to challenge the yearly low marked in July at around 0.6680. During the AUDUSD pair’s weakness past 0.6680, the RSI might have turned oversold and could challenge the bears. Also acting as a downside filter is the 61.8% Fibonacci Expansion (FE) of the August 11 to September 13 moves, close to 0.6645. In a case where the quote drops below 0.6645, the odds of witnessing the 0.6600 threshold on the chart can’t be ruled out.
Overall, AUDUSD is likely to remain on the bear’s radar but the downside room is limited, which suggests further grinding of the pair ahead of next week’s FOMC.
