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AUDUSD Downside Risks Linger Despite Latest Climb

AUDUSD buyers are in the process of trying to extend the ascent from the 13-month low of 0.6992 beyond the falling 50- and 100-day simple moving averages (SMAs). Nevertheless, the bearish SMAs are demonstrating that the directional trend remains skewed to the downside.

The Ichimoku lines are indicating that positive forces are making efforts to take control, while the short-term oscillators are currently reflecting conflicting signals in directional momentum. The MACD, over its red trigger line, is strengthening into the bullish region, while the RSI is crawling higher in the positive zone. That said, the bearish stochastic oscillator is suggesting positive price action is weak, signalling that the averages may curb advances.

As things stand, buyers are confronting immediate downside pressures compounded by the adjacent 50- and 100-day SMAs at 0.7260 and 0.7290 respectively. If the bulls manage to recapture the area above the SMAs and the adjoining Ichimoku cloud, upside momentum could steer the price towards the 0.7370 high. Successfully breaching this too, a continued climb in the pair may eye the 200-day SMA at 0.7439 before trader’s attention turns to the 0.7531-0.7555 resistance zone, formed by the peaks around the end of October.

In the event the 50- and 100-day SMAs cap advances, initial downside friction could occur at the 0.7205 low ahead of a zone of support existing between the Ichimoku lines at 0.7175 and 0.7134 respectively. Should negative pressures intensify, the 0.7082 trough may come into play before sellers turn their focus towards the critical support of 0.6963-0.7020.

Summarizing, AUDUSD is neutral in the short-term timeframe. That said, for downside risks to abate the price would need to rise above the 0.7531-0.7555 resistance border, while a drop past the key 0.6963-0.7020 support base could spark worries about the broader positive structure.

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