AUDUSD Struggles to Extend Bounce as Bearish Risks Linger

AUDUSD recently found a foothold within the 0.7516-0.7542 support foundation, although the aggressive traction off the three-month low of 0.7531 has been muted somewhat. The falling 100- and 200-period simple moving averages (SMAs) are safeguarding the bearish structure while the 50-period SMA remains incapable of disrupting it, despite its slowed downward pace.

Even though the pair has edged over the 50-period SMA at 0.7612, the directionless Ichimoku lines are reflecting the absence of positive drive in the pair to clear the cloud’s lower band and the adjacent high of 0.7637.

However, the short-term oscillators are promoting growing positive momentum. The MACD is slightly above its red trigger line and has nudged over the zero threshold, while the RSI, which was flirting with the 50 level, is trying to improve further into the bullish territory. The stochastic oscillator maintains a positive bearing endorsing positive price gains.

If buyers manage to step above the high of 0.7637, they may encounter a tough zone of resistance between 0.7655 and 0.7686, reinforced by the 100-period SMA at 0.7670. In the event buyers decisively fly above the cloud, the 0.7705 barrier could slow the climb before the 200-period SMA at 0.7730 tries to halt buyers from reaching the 0.7756-0.7772 resistance zone.

If the cloud continues to cap improvements in the pair, initial support may arise from the 50-period SMA at 0.7612 and the nearby low of 0.7590. Diving from here, the 0.7516-0.7542 support base may then have to deal with significant selling interest. Should it fail to dismiss a further decline, the price may sink towards the 0.7461 key trough, identified in December 2020.

Concluding, AUDUSD’s neutral-to-bearish bias will grow increasingly bearish should the cloud, the 100- and 200-period SMAs continue to weigh on the pair. Yet, a shift above the 0.7686 level may see buyers regain some confidence.