FX desks continue to offer Australian dollars, pushing AUD/USD to fresh multi-month lows.
AUD/USD is now trading at 0.7052, the lowest level since July 21. The previous two-month low of 0.7068 was set on Wednesday.
According to Wednesday’s big red marubozu candle, the bearish sentiment is quite strong. Marubozu occurs when sellers lead the price action from UTC open to close.
The pair has also breached the horizontal support of 0.7076 – the low of the Doji candle created on Aug. 3.
As such, AUD/USD looks set to test the 100-day simple moving average (SMA), currently located at 0.70.
However, readers should note that the hourly and 4-hour chart relative strength indexes are currently reporting oversold conditions with a below-30 print. Hence, a minor bounce of consolidation may be seen before a drop to the 100-day SMA.
A close above the descending 10-day SMA, currently at 0.7229, is needed to invalidate the bearish outlook.