- AUD / USD remains under heavy selling pressure for the second day in a row on Thursday.
- The technical setup remains firmly in favor of the bears and supports the prospects for a further decline.
- The attempted recovery move is likely to face strong resistance near the break point of support at 0.7650.
The AUD / USD pair has extended the losses of the previous day and witnessed strong selling for the second day in a row on Thursday. The bearish move has dragged the pair to fresh month-long lows during the first half of the European session, with bears now looking to extend momentum below the 0.7600 level.
From a technical perspective, on Wednesday the AUD / USD pair decisively broke the support of a short-term uptrend line that stretches from the beginning of November. A subsequent dip below the 23.6% Fib retracement of the strong positive move from 0.6990 to 0.7820 could already have set the stage for further short-term weakness.
The bearish outlook is reinforced by the fact that the technical indicators on the daily chart have just crossed into negative territory. Some continuation selling below the 50-day SMA support, around the 0.7585 region, will reaffirm the bearish bias and make the AUD / USD vulnerable to extend its decline.
The move lower could drag the AUD / USD pair towards the key psychological level of 0.7500. This level coincides with the 38.2% Fibonacci, which if it breaks decisively will be seen as a new trigger for the bears. This, in turn, would pave the way for an extension of the current corrective decline.
On the other hand, any recovery attempt runs the risk of quickly disappearing near the breaking point of the horizontal support at 0.7650. This, in turn, should now act as a strong barrier, which if decisively broken could trigger some short-hedging move and push the AUD / USD towards the round 0.7700 level.
AUD / USD daily chart
AUD / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
