AUDUSD sellers in control. What would spoil the bearishness in the short term?

The AUDUSD market shifted further into seller control today following the closes below the 200-day Moving Average (MA) on Monday and Tuesday, at 0.66905. Yesterday, the pair closed slightly beneath the MA at 0.6686, while Monday’s closing price was 0.6674. Today’s high reached 0.66887 ahead of monthly Australia’s Consumer Price Index (CPI) data release. The report showed a lower-than-expected rise in prices of 5.6% for the year to May 2023, compared to the previous month’s 6.8% and an estimate of 6.1%. Despite core measures for the month remaining above 6%, the headline led the market response.

Though the monthly CPI report doesn’t cover as comprehensive a ‘basket’ as the quarterly CPI, the data suggests the Reserve Bank of Australia might maintain steady rates in its meeting next week on July 4.

Technically, AUDUSD experienced a significant drop, piercing a support swing area down to 0.6637. After a brief rebound to 0.6652, the sellers reasserted themselves, pushing the price to a US session low of 0.65965. Since then, price fluctuations have been contained between that level and 0.6622.

What next?

At this juncture, sellers maintain the upper hand. The nearest resistance level is against the 61.8% retracement level. For more cautious traders, the risk level extends up to 0.6652, today’s high price, and the high of the swing area between 0.6637 and 0.6652.

Downward targets sit at 0.6578 and a swing area between 0.6558 and 0.6566. A breach below this swing area would likely trigger further selling momentum.

This article was written by Greg Michalowski at Source