- AUD/USD extends this week’s sharp pullback from multi-month tops.
- Extremely oversold conditions on hourly charts warrant some caution.
The AUD/USD pair maintained its heavily offered tone through the mid-European session on Friday and tumbled to over one-week lows, around the 0.6930 region in the last hour.
A fresh wave of the global risk-aversion trade was seen as one of the key factors exerting some intense bearish pressure on perceived riskier currencies – including the Australian dollar.
Break below the 0.6960-55 confluence support – comprising of 38.2% Fibonacci level of the 0.6839-0.7032 move up and 200-hour SMA – was seen as a key trigger for bearish traders.
A subsequent slide below 50% Fibo. level now seems to have paved the way for an extension of the pair’s recent sharp pullback from over five-month tops set earlier this week.
Meanwhile, technical indicators on the 1-hourly charts are already flashing extremely oversold conditions and have also drifted into the oversold zone on the 4-hourly chart.
This coupled with the fact that oscillators on the daily chart have still managed to hold in the positive territory – though have been losing traction – warrant some caution.
Hence, it will be prudent to wait for some near-term consolidation or a modest bounce before initiating fresh bearish positions for any further near-term depreciating move.
AUD/USD 1-hourly chart
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