AUDUSD – fresh extension lower offsets reversal signal from Wednesday’s Doji
The Aussie extended weakness on Wednesday and hit new 4 ½ month low at 0.7562, offsetting initial reversal signal on Tuesday’s Doji candle.
Bears so far ignore oversold conditions on daily chart and keep the pair under pressure, as greenback continues to trend higher, boosted by rising US yields.
Repeated close below main bull-trendline, drawn off 0.6826 (2016 low) was strong bearish signal for extension of broader downtrend from 0.8135 (2018 high) for test of next strong support at 0.7500 (08/12 Dec lows).
However, corrective action should be anticipated before final push towards 0.7500 target, with broken trendline (0.7623) and broken Fibo support / former base (0.7635/40) marking solid barriers, guarding falling 10SMA (0.7687) and converged 10/20SMA’s (0.7700).
Res: 0.7606; 0.7623; 0.7640; 0.7687
Sup: 0.7562; 0.7530; 0.7500; 0.7480