AUD/USD has been trading in a consolidative manner since Friday, between the 0.6582 support and the 0.6640 resistance. That said, overall, the rate has been trading within a downside channel since December 31st and thus, we would consider the short-term outlook to still be negative.
A clear dip below 0.6582 would confirm a forthcoming lower low and would drive the rate into territories last tested in March 2009. The bears may get encouraged to drive the battle towards the low of the second week of that month, which is approximately at around 0.6545. If they are not willing to throw their swords even after testing that zone, then we may see extensions towards the psychological zone of 0.6500.
Taking a look at our short-term oscillators, we see that the RSI, already below 50, has turned down again, while the MACD, even though above its trigger line, lies within its negative territory and shows signs that it could also turn south soon. Both indicators suggest that this exchange rate may start picking up downside speed again, which supports our view for some further short-term declines.
In order to start examining whether the bears have abandoned the battlefield, we would like to see a decisive break above the 0.6710 level, marked as a resistance by the high of February 19th. The rate would already be above the upper bound of the channel and thus, the bulls may get encouraged to aim for the 0.6750 obstacle, marked by the highs of February 12th and 13th, or the 6777 zone, defined by the peak of January 29th. Another break, above 6777, may set the stage towards the inside swing low of January 22nd, near 0.6825.
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