The AUD/USD pair has extended its downtrend, reaching the 200-period SMA. While the RSI is showing signs of being oversold, the bias remains towards further downside movement.
Following a reversal from the August 29 highs, AUD/USD is currently on a short-term downtrend. As per technical analysis principles, the trend is likely to continue in the same direction, favoring more downside for the pair.
AUD/USD 4-hour Chart
The pair has reached a key support level at 0.6645 and is currently holding above the 200-period Simple Moving Average. A close below this level could signal a continuation of the downtrend towards 0.6587, the 0.50 Fibonacci retracement level from the August rally.
While the RSI indicator is oversold, caution is advised for traders looking to add to their short positions. A potential correction could occur if the RSI moves back into neutral territory. However, further weakness could push AUD/USD towards 0.6565 and 0.6532, where stronger support levels may come into play.
Analysis:
The AUD/USD pair is currently in a downtrend, with key support levels at 0.6645 and potential targets at 0.6587, 0.6565, and 0.6532. Traders should be cautious about adding to short positions due to the oversold RSI indicator, but a break below the 200 SMA could signal further downside movement. Keep an eye on the RSI for potential corrections and monitor price action at support levels for potential trading opportunities.