AUDUSD eyes further downside, monthly support line in focus
AUDUSD justifies a bearish candlestick formation, namely Gravestone Doji, to post the biggest daily losses in a fortnight the previous day. RSI retreat adds strength to the latest declines, suggesting further weakness towards an upward sloping support line from December 20, around 0.7150. During the pair’s weakness past 0.7150, the 0.7080 level may offer an intermediate halt during the fall targeting the year 2021 bottom surrounding 0.6990. It’s worth noting that the 0.7100 and the 0.7000 round figures may act as additional halts during the fall.
Meanwhile, the 100-DMA level surrounding 0.7285 restricts the pair’s short-term upside ahead of the latest swing high near 0.7315. Should AUDUSD bulls keep reins past 0.7315, the bearish candlestick formation gets rejected, which in turn will direct the pair buyers towards the mid-November swing high near 0.7370. During the pair’s sustained run-up beyond 0.7370, the 78.6% Fibonacci retracement level of October-December downside, near 0.7435 and the late October bottom around 0.7450 should entertain buyers.
Overall, AUDUSD prices are likely to witness further downside towards the monthly support line but any further weakness will make it vulnerable to challenge the 2021 bottom.
