The AUD/USD experienced a sharp downward retracement last Thursday as the market anticipated the Federal Reserve interest rate decision. Currently, the Australian government is attempting to stabilize the economy due to slow growth, which has caused the Aussie dollar to lose its momentum. As a result, the pair saw a significant drop below the 0.6700 mark.
Key Price Levels:
Resistance Levels: 0.6700, 0.6800, 0.6900
Support Levels: 0.6600, 0.6500, 0.6400
AUD/USD May Decline Further
Earlier, price action in the AUD/USD rebounded off technical support at the 0.6700 level. Thursday’s price candle appears as a long red bar, breaking through the psychological support level at 0.6700. This move has caused the market to trade below all the Guppy Multiple Moving Average (GMMA) lines.
Additionally, the Stochastic RSI has dipped deep into the oversold region, with its leading line deflected sideways, suggesting a possible crossover attempt. However, this scenario seems unlikely, as technical indicators indicate that headwinds maintain a strong hold on the market.
Bears Remain Dominant in the AUD/USD Market
Price activity in the AUD/USD 4-hour chart shows that bullish forces attempted to mitigate the losses on Friday. However, headwinds pressured the market, leading to further downward movement during the last 4-hour session of the week. Consequently, the pair is now trading well below all the GMMA lines.
Despite the last price candle being green, it appears to stand little chance against the strength of the bears. Furthermore, the Stochastic RSI continues to decline steeply into the oversold region, suggesting no immediate signs of a trend reversal. Therefore, traders can expect a continued downward correction toward the 0.6630 price level.
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