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AUDUSD In Freefall As Selloff Resumes

AUDUSD is looking more bearish by the day in both the near-term and medium-term time frames as the pair keeps carving out fresh 11-year lows after a brief pause. Momentum indicators suggest the negative picture will persist at least in the coming days. The RSI has turned lower again to re-enter the oversold region, while the MACD is deep in negative territory, widening its distance from and below its red signal line.

The pair has just broken its immediate support at the 161.8% Fibonacci extension of the upleg from 0.6753 to 0.7031 at 0.6582. Should bearish forces continue to prevail, sellers could next target the 200% Fibonacci extension at 0.6476. Beyond this point, the 238.2% Fibonacci would come increasingly in focus at 0.6370.

Conversely, in the event that sentiment improves, AUDUSD could initially recover towards the 138.2% Fibonacci at 0.6647 before aiming for the 20-day moving average (MA), which stands slightly below the 123.6% Fibonacci at 0.6688. A successful close above this level would help ease the selling pressure and shift the short-term bias to a positive one.

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However, for the medium-term picture to also start turning bullish, price action would need to establish itself on the north side of the descending trend line and make a reach for the 50-day MA just above the $0.68 level.