AUDUSD selling opportunity | 22 Nov 2022

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After price was significantly hiked upon news of softer than expected US inflation data on 11 November, a ranging AUDUSD can be seen early in the past week as competing macroeconomic events in the US and Australia left traders conflicted on price direction. However the first signs of a potential reversal could be seen late on 16 November when the release of US core retail sales data boosted investor confidence on consumer spending, which increased the prospect of inflation motivated Fed rate hikes and pushed AUDUSD down. Despite tight employment data from Australia being released shortly after that threatened to turn the downside move merely into a retracement on a larger bullish trend, hawkish statements from US Fed members decisively led the transition to a bearish bias. The downside move led prices to test the support level at 0.66500 which coincides with the 38.2% Fibonacci retracement. Price subsequently rebounded, but a breakthrough of the channel late on 22 November indicates a continuation of the downside move. Stochastic RSI is declining from the overbought region back past the 80th percentile level, supporting the bearish bias. We forecast a breakthrough of the 0.65800 support level to reach the next support level at 0.64000 which coincides with the 100% Fibonacci extension level. Tomorrow (23 November), a slew of US economic data expected to be released could trigger a break below the support zone, providing the bearish acceleration to the next support target.