The AUD/USD Pair: A Technical Analysis
The Downtrend Continues
Investors and traders in the foreign exchange market have been closely watching the AUD/USD pair as it continues its downward trajectory. The pair broke below the key level of 0.6650, signaling a resumption of the short and medium-term downtrend that began at the September 30 highs.
What the Charts Say
Looking at the daily chart for AUD/USD, we can see that the next bearish target is the green 200-day Simple Moving Average (SMA) at 0.6628. Further downside movement would depend on breaking below this level and the key support level at 0.6622, which was established on September 11.
- If the pair successfully breaks below these levels, the next target is 0.6565, the swing low from August 15.
- It’s important to note that momentum, as indicated by the Relative Strength Index (RSI), is showing signs of weakening bearish pressure. This could suggest a potential lack of follow-through to the downside.
What to Watch For
As the AUD/USD pair continues its downward movement, here are some key points to keep in mind:
- The establishment of a lower low below 0.6650 indicates a continuation of the downtrend.
- Breaking below the 200-day SMA at 0.6628 could lead to further downside movement.
- Watch for potential support levels at 0.6622 and 0.6565 as the pair continues to decline.
While technical analysis can provide valuable insights into market trends, it’s important to consider other factors such as economic data, geopolitical events, and market sentiment when making investment decisions.
Conclusion
Overall, the AUD/USD pair is showing signs of continued weakness, with the potential for further downside movement in the near term. Investors and traders should closely monitor key support levels and indicators such as the RSI to gauge the strength of the downtrend.