AUDUSD is pulling back

The recent strength in the American dollar made investors to dump riskier currencies as the Australian or the New Zealand dollar. The AUDUSD pair hit a resistance level around the psychological 0.7800 area (A) and printed a rather impressive red candlestick, forming a so called dark cloud pattern (the body of the red candle fully covers the body of the previous day candle´s body). In the same time the Relative Strength Index is showing a descending trendline, supporting the negative sentiment.

If the course breaks below the moving averages, it could be halted by the support area 0.7600 – 0.7580 (B). Sliding below this level might indicate a longer term downtrend. On the other hand, if the bulls keep up with their strength and manage to push the price above resistance A, the course could rise to highs not seen for three years.