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  • AUDUSD gains more than 6% after bottoming at 0.6350

  • Immediate resistance near long-term downtrend line

  • Technical oscillators suggest bearish correction

AUDUSD has posted an impressive bullish rally after the bearish doji candle on August 5, adding more than 6%. The price has overcome the simple moving average lines and is currently slightly below the weekly downtrend line, which represents the highs from January 2023.

However, the technical oscillators indicate a downside retracement in the market. The stochastic created a bearish crossover within its %K and %D lines in the overbought territory, while the RSI is moving horizontally, marginally beneath the 70 level.

If the upside moves extend beyond the 0.6770 level, which is near the descending trend line, the price may rest around the 0.6800 psychological mark. More advances could take the pair until the December 2023 top at 0.6870.

On the other hand, a slip lower could shift traders’ attention to the SMA lines between 0.6645-0.6600. The next support at 0.6560 may act as a strong turning point in the market before falling to 0.6465.

In a nutshell, AUDUSD has been positive in the short-term picture, but in the bigger outlook, the market will remain negative until a break above the long-term falling trend line occurs.