AUDUSD has been on the rise since the confirmation of a bullish morning star candlestick pattern, which foresaw the start of a new bullish round last Friday, but another challenge is currently displaying on the radar. Particularly, the price needs to close decisively above the 20-day simple moving average (SMA) at 0.7298, which has been cancelling upside pressures since the end of May.
Of note, the RSI continues to fluctuate below its 50 neutral mark, failing to print higher highs despite its recent advance, while the MACD, although a bit stronger, remains attached to its red signal line. Additionally, the red Tenkan-sen line is showing no sign of correcting its bearish cross with the blue Kijun-sen line as the downward-sloping 20- and 50-day SMAs keep promoting a down-trending market. Overall, downside risks seem to be present.
Should the 20-day SMA put the breaks on the bullish action, pressing the price below 0.7230, all the attention will turn back to the nine-month low of 0.7105. Breaching that floor, the pair could mark a new lower low near the 0.7020 restrictive region last active during the second half of 2020, while a steeper decline could target the 0.6920 handle.
In the positive scenario, a clear extension above the 20-day SMA may last until the 0.7400 resistance area, where the 50-day SMA is also hovering. Higher, a step above the Ichimoku cloud, which was a tough obstacle from the end of May to mid-June, may be needed to open the door for the 200-day SMA.
Summarizing, despite the bullish candlestick signals, the latest rebound in AUDUSD is still under scrutiny as the price is approaching a familiar resistance.