AUD/USD analysis displays bearish vibes

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Demand at 0.6358/0.6839 remains in the fight, yet price struggles to chalk up anything meaningful to the upside. An eventual break of the said demand zone has another layer of demand close by at 0.6094/0.5866, while a recovery could lead to trendline support-turned resistance (0.4776) making an appearance, followed by supply at 0.8303/0.8082.

The pair traded -2.80% in February.

Daily timeframe:

In light of recent downside in this market, testing multi-year lows at 0.6433, supply formed at 1.6585/1.6625. Further selling this week could approach demand at 0.6330/0.6245.

The RSI recently re-entered oversold territory, trading at 23.00.

H4 timeframe:

Supply at 0.6607/0.6588 made its debut last week, capping recovery gains off lows at 0.6542. Candlestick action pencilled in a strong bearish rotation off the said supply area, closing a touch off lows, generating follow-through selling on Friday.

Support on this timeframe falls in at the 161.8% Fibonacci ext. point at 0.6483, though a feasible ceiling is also visible off channel support-turned resistance (0.6585).

H1 timeframe:

Friday regained 0.65 on the H1 timeframe amid US hours and tested a 61.8% Fibonacci retracement at 0.6531, following aggressive session lows at 0.6434. The 61.8% Fibonacci retracement is stationed just south of supply at 0.6545/0.6536 and the 0.6550 barrier.

It might also interest traders to note that we have the 100-period SMA circulating 0.6568.

0.65 is likely to re-enter view today, yet whether it will hold as support is difficult to judge, knowing the trend in this market faces a southerly trajectory.

Direction:

Longer term:

Monthly demand at 0.6358/0.6839 is rapidly deteriorating, with daily price exhibiting scope to test lower levels this week. Technical research, thus, anticipates additional selling to materialise over the coming weeks.

Shorter term:

With H4 price retesting the underside of channel support-turned resistance, a break of the 161.8% Fibonacci ext. at 0.6483 is possible, in line with the current trend. Similarly, on the H1 chart, the possibility of 0.65 holding is slim, after taking into account the overall market structure.

Traders, therefore, may seek bearish themes south of 0.65 today, targeting Friday’s low at 0.6433 as an initial base.