AUD/USD Reaches Bearish Exhaustion, May Reverse Course at 0.6846

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AUD/USD Significant Levels
Resistance Levels: 0.7400, 0.7600, and 0.7800
Support Levels: 0.7100, 0.6900 and 0.6700

AUD/USD Price Long-term Trend: Bearish
AUD/USD is in a downtrend and it may reverse course at 0.6846 . The downtrend was created after the formation of a bearish double top. The pair was rejected at level 0.7900 overhead resistance. The currency price broke below the moving averages to reach the low of 0.7105. The pair is likely to further decline as it approaches the oversold region of the market. Meanwhile, on November 29 downtrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that AUD/USD will fall but reverse at level 1.272 Fibonacci extension or level 0.6830.

AUD/USD Reaches Bearish Exhaustion, May Reverse Course at 0.6846
AUD/USD – Weekly Chart

Weekly Chart Indicators Reading:
AUD/USD is at level 41 of the Relative Strength Index for period 14. The currency pair is in the downtrend zone and capable of falling on the downside. The currency pair has a bearish crossover. That is, the 21-day SMA crosses below the 50-day SMA indicating a sell order. The 21-day SMA and the 50-day SMA are sloping southward indicating the downtrend.

AUD/USD Medium-term Trend: Bearish
On the Daily chart, the currency price is in a downward move. The bears broke below the previous low of level 0.7071. The currency price pulled back and retested the previous low indicating a further downward movement of prices. Meanwhile, on December 3 downtrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that AUD/USD will fall but reverse at level 1.272 Fibonacci extension or level 0.6846.

AUD/USD Reaches Bearish Exhaustion, May Reverse Course at 0.6846
AUD/USD – Daily Chart

Daily-hour Chart Indicators Reading
The pair is below the 80% range of the daily stochastic. The market is in a bearish momentum. The 21-day and 50-day SMAs are sloping downward indicating the downtrend.

General Outlook for AUD/USD
AUD/USD has been in a downtrend since May and it may reverse course at 0.6846. On December 3, the currency pairs fell to the oversold region of the market. The downtrend has reached bearish exhaustion. The Fibonacci tool has indicated a possible trend reversal at level 0.6846.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.