- AUD/USD bears are in control and target a downside extension.
- The bulls could look to the neckline of the daily M-formation thereafter.
AUD/USD fell from 0.7460 to 0.7420 overnight and remains on the backfoot, with bears eeking out a score of 0.7411 in Asia. Looking at the weekly and daily charts, the outlook remains bearish until weekly and daily support structures as illustrated below.
AUD/USD weekly chart
The price rallied to a high of 0.7663 which was met with an intense bout of supply last week, leaving the outlook bearish for the days ahead this week.
AUD/USD daily chart
From the daily chart's perspective, there is some room to go to the downside until the prior resistance looking left. Currently, the neckline of the M-formation aligns with the 23.6% ratio, but the 38.2%, a preferred Fibonacci level, would align with the same resistance once the price reaches the aforementioned downside target and presumed support area.
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