· AUDUSD pulls back from 1-year downtrend line
· Strong resistance lines to test before switching the downtrend
· RSI and stochastic indicate more losses
As the year 2023 is approaching its conclusion, AUDUSD is continuing the descending movement that started back in February 2021. Currently, the pair is testing the downtrend line, which has been drawn since January and the 50-week simple moving average (SMA).
According to technical oscillators, they are confirming the recent negative movement on price as the RSI is ticking down near the neutral threshold of 50, while the stochastic is ready to post a bearish crossover within its %K and %D lines in the overbought market, suggesting that bears would take the upper hand again in the short-term.
Now should sellers stay in charge, the first obstacle to the downside might be the 0.6520 zone, which has acted both as support and resistance in recent months. If violated, the spotlight would then shift to the one-year low of 0.6265 area, which halted the retreat in October.
In case buyers take control and pierce above the one-year falling trend line, then it may manage to hit the very long-term downtrend line, which overlaps with the 100-week SMA at 0.6790. Moving higher, the 0.6900 psychological mark and the 200-week SMA at 0.7000 could be significant resistance levels to have in mind, changing the outlook to neutral.
Summarizing, the long-term outlook remains clearly negative. A decisive break above 0.7000 is needed to bring that into doubt, although a pullback from the recent descending line would confirm again the current trend.
