Forex Video Briefing (11/20) – AUD/USD in Bearish Continuation
In the 4H AUD/USD chart, we can see price rallying from a new low on the year at 0.8540 up to 0.8795 in the first half of November. Since then, price has fallen back below the cluster of simple moving averages and below a rising trendline. The RSI tagged 30 again, displaying bearish momentum. AUD/USD looks poised to continue its prevailing downtrend.
The 11/20 US session is showing USD-weakness, and AUD/USD is in a pullback. However, when price approaches 0.8675-0.87, we should expect sellers. This is the middle of the SMA cluster and a previous support area. The ability to hold below 0.87, forgiving some intra-session breach, should maintain the bearish outlook, especially if the 4H RSI comes up but holds under 60. That would confirm the bearish outlook, with pressure on 0.8540, and with risk of breaking lower towards 0.85.
Now, if price breaks back above 0.87, AUD/USD is still in consolidation. That is not to say it is no longer bearish, but we might have to be a bit more patient, and allow some short-term upside risk. However, if price breaks above 0.89, we might need to shelve the bearish outlook in favor or a sideways or even bullish one upon more clues.