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  • AUD/USD looks oversold as per the daily chart RSI. 
  • The 4-hour chart RSI is reporting a bullish divergence. 
  • The broader trend remains bearish with the pair stuck in a falling channel. 

AUD/USD may witness a corrective bounce as technical charts are signaling seller exhaustion. 

To start with, the 14-day relative strength index (RSI) is reporting oversold conditions with a below-30 print. 

Meanwhile, the 4-hour chart RSI has charted higher lows, contradicting lower lows on price. That bullish divergence indicates the bearish momentum has ebbed. The inverted hammer seen on the 4-hour chart is also echoing similar sentiments. 

The spot, therefore, could challenge the 4-hour chart resistance at 0.6585. The overall bias, however, would remain bearish as long as the pair is trapped in a falling channel on the daily chart. 

Also, corrective bounce to 0.6585, if any, could be short-lived, as bearish sentiment is quite strong, as indicated by Wednesday’s big red marubozu candle. 

Daily chart

4-hour chart

Trend: Oversold bounce

Technical levels