Technical Analysis – AUDUSD breaks the lower bound of a sideways range

• AUDUSD extends slide after breaking lower bound of range

• MACD and RSI detect bearish momentum

• Break below 0.6390 could aim for 0.6335

• Recovery above 0.6500 could signal return within range

AUDUSD extended its tumble on Monday and during the Asian session Tuesday, falling below the key support barrier of 0.6455. On Friday, the pair broke below the lower end of a sideways range that was containing most of the price action since mid-January, and the dip below 0.6455 may have confirmed the shift in the near-term picture to bearish.

The short-term oscillators corroborate that view. The MACD is lying below both its zero and trigger lines, while the RSI is running below 30, pointing down as well.

If the bears are willing to stay in the driver’s seat, they could aim for the inside swing high of November 13, at around 0.6390, the break of which could extend the fall towards the low of the previous day, at around 0.6335. If there are no buyers to be found there either, then the next area to consider as support may be at around 0.6280. That zone stopped the pair from drifting lower on several occasions during October.

On the upside, a break back above 0.6500 may confirm the pair’s return within the aforementioned sideways range and thereby turn the outlook back to neutral. For the picture to be painted positively, AUDUSD may need to further recover and emerge above the upper bound of the range, at around 0.6615.

To sum up, AUDUSD continues to drift south after breaking the lower boundary of a sideways range that was in place since January. This has shifted the short-term outlook to bearish and suggests that further declines may be in store.