AUD/USD traded lower during the Asian morning Thursday, after it hit resistance slightly below the 0.7775 level. Nevertheless, the slide was stopped by the 0.7740 level, a barrier that acted as a good support zone yesterday as well. The pair has been oscillating between those two hurdles since Tuesday and thus, we prefer to take the sidelines for now.
Having said that though, Monday’s recovery came after the pair tested several times the 0.7655 zone, which is slightly above the lower bound of the downside channel that has been containing the price action since the beginnings of February. Therefore, there is a decent likelihood for the bulls to take charge again and perhaps drive the battle up for another test near 0.7775. A decisive move above that resistance could see scope for more upside extensions, and perhaps target our next obstacle of 0.7805.
Taking a look at our short-term oscillators, we see that both the RSI and the MACD continue to respect their upside support lines, which corroborates the view for another positive leg in the near future. However, the RSI turned down after it found resistance slightly below 70, while the MACD, although positive, has topped and fallen below its trigger lines. These signs suggest that some more retreat may be in the works before the bulls decide to shoot again.
Even if the rate dips below 0.7740, our next support stands at around 0.7725, where buyers may seize the opportunity and jump in again. We would like to see a clear break below 0.7725 before we start examining whether the bulls have abandoned the battle field. Such a move could set the stage for bearish extensions towards the 0.7690 zone.
