AUD/USD has turned bearish since the end of March, seeing 6 bearish sessions out of the 7 trading sessions, marking the worst weekly performance this year.
The slump was caused by the strengthening of USD and the fall in iron ore prices.
The current trend remains bearish. On the 4-hourly chart, the price still trades below the 10 and 20 SMAs.
This morning during early European session, AUD/USD hit a 12-week low of 0.7475, the significant support level at 0.7500 was broken.
The range between 0.7475 – 0.7500 is the short-term major support zone.
The bulls are attempting to recover the level at 0.7500. If the bulls are unsuccessful in breaching 0.7500 and holding above the support line at 0.7475, the likelihood will be that the downtrend will continue, and the bears will test the next significant support line at 0.7450.
Conversely, if the bulls are successful in holding the downtrend, we will likely see a rebound here.
Both the daily and 4-hourly Stochastic Oscillator readings are below 20, suggesting a rebound.
The resistance level is at 0.7500, followed by 0.7520 and 0.7535.
The support line is at 0.7475, followed by 0.7450 and 0.7430.
Keep an eye on the Fed Chair Yellen’s speech at 21:10 BST this evening, as it will likely affect the strength of USD and the trend of AUD/USD.