- Short-term momentum is likely to have turned negative as seen in the hourly RSI.
- Key short-term resistance stands at 0.6720.
- Intermediate supports to watch will be at 0.6630 and 0.6600/6580.
This is a follow-up analysis of our prior report, “AUD/USD Technical: Positive momentum ahead of RBA” published on 4 July 2023. Click here for a recap.
The price actions of the AUD/USD have staged the expected push-up and met the first resistance of 0.6720 as it printed a current intraday high of 0.6742 in today, 12 July Asian session.
Short-term elements are suggesting the risk of a short-term retreat as the release of the US CPI data looms later today at 1230 GMT.
Reintegrated below 20 and 200-day moving averages
Fig 1: AUD/USD medium-term trend as of 12 Jul 2023 (Source: TradingView, click to enlarge chart)
The recent one and half week of rebound of +145 pips seen on the AUD/USD from its minor swing low of 29 June 2023 has stalled at the key 20 and 200-day moving averages which confluences with the 27 June 2023 swing high and the 38.2 % Fibonacci retracement of the prior minor decline from 16 June 2023 high of 0.6900 to 29 June 2023 low as well as the 1.236 Fibonacci extension of the rebound from 29 June 2023 low to 4 July 2023 high projected from 6 July 2023 low.
Short-term momentum has turned negative
Fig 2: AUD/USD minor short-term trend as of 12 Jul 2023 (Source: TradingView, click to enlarge chart)
The hourly RSI oscillator has just exited its overbought region (above the 70 level) today and right now, it is attempting to break below its parallel ascending support at the 49 level which suggests that short-term momentum is likely to have turned negative.
Watch the 0.6720 key short-term pivotal resistance to maintain a bearish tone; a break below 0.6630 exposes the next support at 0.6600/6580.
However, a clearance above 0.6720 negates the short-term bearish tone to see the next resistance at 0.6790 (also, close to the 61.8% Fibonacci retracement of the prior minor decline from 16 June 2023 high of 0.6900 to 29 June 2023 low).
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Kelvin Wong