AUDUSD has been on a downward trend since July 11, dropping to its lowest level since May 1. The pair has broken both its 50- and 200-day simple moving averages, indicating a bearish market sentiment. Despite hitting a fresh two-month low, there is a possibility of a potential upside bounce as the momentum indicators suggest that the decline may be overextended.
If the bearish pressure continues, the pair could target the recent low of 0.6479, with a potential break leading to a further decline towards the February low of 0.6441 and even the 2024 low of 0.6363. On the other hand, if the price reverses course and moves higher, it may face resistance at 0.6558, a level that has previously acted as both support and resistance. Breaking above this level could pave the way for further gains towards 0.6618, followed by the April-May resistance at 0.6643 and potentially the May peak of 0.6713.
In summary, AUDUSD has experienced significant selling pressure in the short term, with a decrease of over 4.5% from its July high. However, traders should be cautious as the short-term oscillators are indicating oversold conditions, suggesting a potential reversal in the near future.
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