• AUD/USD extends the previous day’s pullback from five-month high, renews weekly low.
  • Confirmation of bearish chart pattern, sustained break of 50-SMA favor sellers.
  • 200-SMA, monthly support line probe bears even as oscillators suggest further downside.

AUD/USD remains on the back foot for the second consecutive day after refreshing the multi-month high, down half a percent as bears poke the 0.6900 threshold during early Thursday.

In doing so, the Aussie pair justifies the previous confirmation of the two-week-old rising wedge bearish chart pattern, as well as the 50-SMA breakdown.

Also favoring the AUD/USD pair in refreshing the weekly low is the downbeat RSI (14) line, not oversold, as well as the bearish MACD signals.

That said, the rising wedge confirmation signals the theoretical target of around 0.6630 but the RSI line has limited room before it hits the oversold territory. As a result, the 200-SMA and an upward-sloping support line from December 20, 2022, respectively near 0.6800 and 0.6785, could challenge the AUD/USD sellers.

Meanwhile, recovery moves need to cross the 50-SMA hurdle of 0.6945 to restore bullish confidence.

Following that, the lower line of the stated wedge, close to 0.6980, precedes the 0.7000 psychological magnet to probe the upside momentum.

In a case where the AUD/USD price remains firmer past 0.7000, the monthly high of 0.7065 and the August 2022 peak surrounding 0.7135, will gain the market’s attention.

Overall, AUD/USD is likely to decline further but the downside room appears limited.

AUD/USD: Four-hour chart

Trend: Further downside expected

This article was originally published by Fxstreet.com.Read the original article here.