AUD/USD Price Analysis: Extends pullback from 200-EMA towards 0.6560 support confluence
|- AUD/USD holds lower grounds around intraday low while snapping two-day uptrend.
- RSI (14) line’s retreat from overbought territory joins U-turn from 200-EMA to lure Aussie sellers.
- Convergence of 50-EMA, one-week-old horizontal support zone challenges intraday sellers.
AUD/USD licks its wounds around the intraday low of 0.6595 while printing the first daily loss in three amid Monday’s mid-Asian session. In doing so, the Aussie pair keeps the previous day’s retreat from the 200-bar Exponential Moving Average (EMA).
Adding strength to the downside bias is the RSI (14) line’s U-turn from the overbought territory, as well as the receding bullish bias of the MACD indicator.
However, a convergence of the 50-EMA and multiple levels marked since May 24, around 0.6565-60, appears a tough nut to crack for the AUD/USD bears.
In a case where the Aussie pair drops below 0.6560, a quick drop towards another key horizontal support zone surrounding 0.6490, comprising levels marked in the last week, can’t be ruled out.
It’s worth observing though that the AUD/USD pair’s weakness past 0.6490 needs validation from the previous monthly low of around 0.6460 to keep the bears on board.
On the contrary, AUD/USD recovery remains elusive below the 200-EMA hurdle surrounding 0.6630.
Also acting as upside filters are 50% and 61.8% Fibonacci retracements of the pair’s May 10-31 downside, respectively near 0.6640 and 0.6680.
Overall, AUD/USD remains on the back foot but the downside room appears limited.
AUD/USD: Four-hour chart
Trend: Limited downside expected
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