The AUDUSD is oversold technically.
If you looked at the hourly chart, the RSI (relative strength index -see chart below) is diverging after reaching oversold levels and extending to a new low going back to November 2022 today. That is a signal that the market may be poised for a rebound higher.
Having said that, the price of the AUDUSD remains below the swing low from the end of May at 0.64586 and also below the 100-hour moving average at 0.64896.
Going forward, if the price of the AUDUSD can get above both those levels, that would give buyers more confidence that a corrective move can be anticipated. The 200-hour moving average at 0.65206 would be another target to get to and through to increase the bullish bias. If all that can be done, trainers can anticipate further corrective potential to the upside.
On the downside, a move to new lows would ruin the “bounce higher from oversold conditions” idea. Trends are fast, directional and tend to go farther than traders think. Although the price is oversold, it can get more oversold. As a result, showing that the buyers can get above technical levels on the topside is a requirement if trying to pick a bottom in a trending market
This article was written by Greg Michalowski at www.forexlive.com. Source