AUDUSD Bears Eye 0.75 Level After Breaking Key Support

AUDUSD has broken below the key support level of 0.7560, which was successfully defended back in February and March, and is now plumbing fresh 3-month lows. The momentum indicators are pointing to increased bearish bias in the short term. The RSI is declining and heading towards the 30 oversold level, while the %K of the stochastic oscillator has crossed back below the %D line and both are falling.

At this rate, it’s only a matter of time before the psychologically important 0.75 level is put to the test. The 50% Fibonacci of the November 2020-February 2021 uptrend passes just below this mark at 0.7498, adding even more significance to this support region. A drop below it would open the way for the 200-day moving average (MA), which lies just above the 61.8% Fibonacci of 0.7378.

Failure to hold above the 200-day MA would hand the bears full control as the recently turned neutral outlook in the medium term would be downgraded further, switching to bearish. Even lower, the 78.6% Fibonacci of 0.7208 could next attract attention.

However, should the negative bias ease and prices were to recoup some lost ground, the 38.2% Fibonacci of 0.7618 would be the first major obstacle on the upside. Above that, the 20-day MA, currently at 0.7688, would be important for the bulls to reclaim if they are to revive some positive momentum.

Climbing back above the 20-day MA would help alleviate the downside pressure in the near term but unless prices are able to keep above the 200-day MA, the longer-run uptrend that began in March 2020 is at risk of faltering.