September 14, 2022 01:26 AM ET
The AUD/USD pair is trying to recover from a bloodbath. The asset slid vertically to near 0.6725 after the release of a high US inflation rate. An attempt to rebound could be a dead cat bounce as strength is nowhere in sight. The major is trading in a narrow range of 0.6723-0.6747 in late Tokyo trading.
The formation of a bearish marubozu candlestick concluded the short-term pullback movement. The appearance of the aforementioned candlestick pattern shows the strength of the greenback's bulls and hints at further weakness.
The asset has felt resistance from the 50-period exponential moving average (EMA) at around 0.6900.
This will continue to be an obstacle for Australian bulls.
Meanwhile, the Relative Strength Index (RSI) (14) is about to fall into the bearish 20.00–40.00 area. This will trigger more downward momentum and bring more weakness to the counter.
A break below Wednesday's low at 0.6723 will take the asset to the lower end of the demand zone, which is placed in a range of 0.6670-0.6700 on a daily basis. A violation of the demand zone will trigger the greenback's bullishness and the asset will fall towards the round support level of 0.6600.
On the other hand, a break above the September 5 high at 0.6804 will drive the asset towards the August 29 low at 0.6841, followed by the August 31 high at 0.6904.