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  • AUD/USD witnessed a sharp intraday turnaround from levels beyond the 0.7300 mark.
  • Bears now await a sustained break below a multi-week-old ascending channel support.
  • The pair might then turn vulnerable to accelerate the slide towards the 0.7100 level.

The AUD/USD pair struggled to capitalize on its early uptick to levels beyond the 0.7300 mark and witnessed a dramatic turnaround on Tuesday. The steep intraday slide dragged the pair to near two-week lows, around the 0.7220 region, during the early North American session.

Looking at the technical picture, the pair was last seen hovering near a support marked by the lower boundary of a short-term ascending channel extending from mid-June. A convincing breakthrough will set the stage for an extension of the recent corrective slide from the channel resistance, or two-year tops set last Tuesday.

Meanwhile, technical indicators on the daily chart have been losing positive momentum but are yet to confirm a bearish bias. Moreover, RSI (14) on hourly charts are already flashing oversold conditions. This makes it prudent to wait for a convincing break through the channel support before positioning for any further weakness.

The pair might then turn vulnerable to break below the 0.7200 mark and accelerate the slide further towards the next major support near the 0.7155-50 region. Some follow-through selling should pave the way for a further near-term depreciating move, possibly towards challenging the 0.7100 round-figure mark.

On the flip side, any meaningful bounce might now be seen as a selling opportunity and remain capped near the 0.7300-10 region. That said, a sustained strength beyond will negate the bearish outlook and lift the pair back to the 0.7370 horizontal resistance en-route the 0.7400 level and trend-channel resistance, around the 0.7430 region.

AUD/USD 4-hourly chart

fxsoriginal

Technical levels to watch