AUD/USD Analysis: Anticipated Rebound Amid Oversold Conditions and Key Fibonacci Levels
The AUD/USD seems to pause its downward trend after hitting a new annual low, with the significantly oversold RSI and a vital Fibonacci ratio indicating a potential resistance against further declines. The pair recently touched the 0.6364 mark and is currently hovering around 0.6390 as Thursday’s European trading session approaches.
Despite its current dip, the RSI (14) showcases strong oversold signals, hinting at a possible upward correction on the horizon. Adding to the potential roadblocks for further depreciation is the 78.6% Fibonacci retracement level of the AUD/USD’s ascent from October 2022 to February 2023, positioned near 0.6375.
Given these indicators, the currency pair may recoup some of its recent losses. The next upside resistance can be spotted near May’s low, approximately at 0.6460. To regain a dominant stance, AUD/USD bulls will need to surpass the significant barrier around the 0.6600 mark, which corresponds to the lows seen in late June and early July.
Earlier this month, the AUD/USD confirmed a bearish “Double Tops” pattern when it broke below 0.6600. This chart formation sets a theoretical downside target at 0.6300, assuming the currency remains below the 0.6600 threshold.
If the AUD/USD manages to breach the 0.6600 level, a rally towards the highs seen in early July, around 0.6700, and possibly extending to the monthly high of 0.6725, becomes plausible.
On the other hand, should the pair decline past the 0.6300 target, it might set its sights on the preceding annual low near 0.6170.
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