AUD/USD Price Analysis: Eyes minor bounce as charts signal oversold conditions
- AUD/USD looks oversold as per the daily chart RSI.
- The 4-hour chart RSI is reporting a bullish divergence.
- The broader trend remains bearish with the pair stuck in a falling channel.
AUD/USD may witness a corrective bounce as technical charts are signaling seller exhaustion.
To start with, the 14-day relative strength index (RSI) is reporting oversold conditions with a below-30 print.
Meanwhile, the 4-hour chart RSI has charted higher lows, contradicting lower lows on price. That bullish divergence indicates the bearish momentum has ebbed. The inverted hammer seen on the 4-hour chart is also echoing similar sentiments.
The spot, therefore, could challenge the 4-hour chart resistance at 0.6585. The overall bias, however, would remain bearish as long as the pair is trapped in a falling channel on the daily chart.
Also, corrective bounce to 0.6585, if any, could be short-lived, as bearish sentiment is quite strong, as indicated by Wednesday's big red marubozu candle.
Trend: Oversold bounce