• AUDUSD extends downtrend

• Short-term outlook is gloomy, but recovery attempts still likely

• Eyes on 0.6300 ahead of RBA meeting

AUDUSD plunged to a new 10-month low of 0.6330 on Wednesday, putting the downtrend from July back into play ahead of RBA’s policy decision on Tuesday.

The clear bearish breakout below the 2020 support trendline has further worsened the short-term outlook. Despite that, the price hasn’t deviated significantly below its September-August lows, and it’s still hovering around the lower Bollinger band. This leaves a ray of hope that an upside correction could still happen. Note that the RSI is pushing for a rebound near its recent lows, while the stochastic oscillator is entering the oversold region.

If downside forces resurface, the focus will immediately fall on the strong support line from last December at 0.6300. An extension lower, and more importantly, a close beneath the 0.6280 base from November 3 could press the price towards the 0.6200 round level. Then, the bears could head for the 0.6120-0.6100 former constraining zone if the 2022 trough of 0.6169 gives way.

On the upside, traders will look for a rebound above the 0.6415-0.6450 zone, which encapsulates the 20-day exponential moving average (EMA) and the broken 2020 support trendline. Should July’s descending trendline and the 50-day EMA prove easy to overcome, the recovery might stretch up to the 0.6520 resistance. Even higher, the caution area around 0.6570 and the 200-day EMA could be the next challenge.

In brief, the short-term risk for AUDUSD remains skewed to the downside, but the bulls might put up another fight as key support levels are nearby. Otherwise, selling interest is expected to intensify below 0.6280-0.6300.