Australian Dollar's Struggle Below EMA 50 Explained
Solid ECN – The Australian dollar trades at about 0.644 against the U.S. dollar as of writing, slightly below the broken support level of 0.6455. Interestingly, the AUDUSD 4-hour chart shows a doji candlestick pattern, highlighted in the image above.
The Relative Strength Index still hovers below 50, but the Awesome Oscillator bars are green, giving mixed signals. Despite the contradiction between the technical indicators, the primary trend is bearish, and the pair trades below EMA 50. Based on price action analysis, our first bearish signal is the doji candlestick pattern.
Therefore, from a technical standpoint, selling pressure will likely increase if the AUDUSD remains below EMA 50. Should the market shift downwards, its initial target would be this week's low of 0.6389.
Conversely, EMA 50 is the dividing line between bull and bear markets. The bear market could be considered over if the price crosses and stabilizes above EMA 50. In this scenario, the uptick momentum that began this week at 0.6389 could extend to 0.652.