AUDUSD Extends Sideways Move Amid Diverging Signals

AUDUSD had been trending lower within a downward sloping channel after peaking at 0.7157 in early February. Although the pair managed to break above this bearish pattern, it has been directionless since then, with the recent completion of a death cross between the 50-day simple moving average (SMA) and the 200-day SMA inducing negative pressures.

However, the short-term oscillators are cautiously tilting towards the positive side. The RSI is holding slightly above its 50-neutral mark, while the MACD histogram is battling with the zero mark but remains comfortably above its red signal line.

Should the price move to the upside, the recent resistance of 0.6746, which lies very close to the 200-day SMA could be the first barricade for buyers to conquer. Jumping above that zone, the pair could ascend towards the April high of 0.6805 before 0.6920 gets tested. Failing to halt there, the price might encounter strong resistance at 0.7030.

Alternatively, if the bears manage to push the price lower, 06680 could act as the first line of defense. Sliding beneath that floor, the price may challenge the April low of 0.6620 before the spotlight turns to 0.6590. A dive below the latter could set the stage for the 2023 bottom of 0.6563.

Overall, AUDUSD seems to be in a neutral phase, with the technical indicators providing mixed signals. For the bulls to regain confidence, the pair needs to re-enter the Ichimoku cloud and jump above both its 50- and 200-day SMAs.

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