Needs to break below 0.7100 to pave the way for further weakness

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  • AUD / USD remained depressed during the North American session on Monday.
  • Mixed oscillators on hourly / daily charts deserve caution before placing directional bets.

The pair AUD/USD It struggled to capitalize on its good intraday bounce of around 40-45 pips and was last seen trading modest losses around the 0.7120-25 region.

The pair showed some resistance below the 100 hourly EMA and attracted some buying on the dips near 0.7100. However, the prevailing climate of risk aversion continued to benefit the dollar as a safe haven and kept the recovery attempt limited.

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Meanwhile, the recent positive move of the past two weeks has repeatedly failed near a multi-day ascending trend line resistance. Expectations of further easing by the RBA in November appeared to be a key factor limiting the AUD / USD gains.

With that said, mixed technical indicators on hourly / daily charts warrant some caution before placing aggressive directional bets. This makes it prudent to wait for some subsequent selling below 0.7100 before placing any intraday bearish bets.

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The AUD / USD pair could become vulnerable to try to retest the horizontal support 0.7025-20. The downward trajectory could extend further and help bearish traders point back and challenge the key psychological level of 0.7000.

On the other hand, the horizontal level of 0.7145 now appears to have emerged as immediate resistance. Any further bullish movement could continue to face stiff resistance and remain limited near the mentioned trend line, currently near the 0.7170-75 region.

1 hour chart

Technical levels

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Credits: Forex Street

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