- The AUD/USD pair struggled to find acceptance above 38.2% Fibo. level of the 0.7048-0.6957 slide and started retreating from a resistance marked by the top end of an ascending trend-channel.
- Against the backdrop of the recent pullback from two-month tops, the mentioned channel constituted towards the formation of a bearish continuation – Flag chart pattern on the 1-hourly chart.
Given that the pair has already slipped below the trend-channel support, intraday bias might have already shifted back in favour of bearish traders amid fading optimism over a quick resolution to the US-China trade disputes and tempered expectations for aggressive Fed rate cuts.
Technical indicators on hourly charts maintained their bearish bias and add credence to the negative outlook. Meanwhile, oscillators on the daily chart have been losing positive momentum but are yet to flash bearish signals and thus, warrant some caution for aggressive traders.
Sustained weakness below the 0.6960-55 horizontal support – coinciding with 50-day SMA, will reaffirm a near-term bearish breakdown and turn the pair vulnerable to accelerate the slide further towards challenging the 0.6900 handle en-route the next support near the 0.6870-65 region.
On the flip side, the key 0.70 psychological mark now becomes immediate strong resistance, which if cleared might negate the negative outlook and prompt some near-term short-covering move, lifting the pair back towards retesting the 0.7050-60 supply zone.
AUD/USD 1-hourly chart