AUD/USD Price Analysis: Darvas Box breaks on downside, 20-EMA to remain a critical hurdle
12.07.2022, 00:43

AUD/USD Price Analysis: Darvas Box breaks on downside, 20-EMA to remain a critical hurdle

  • The downside break of the Darvas box has resulted in volatility expansion in the asset.
  • A bear cross, represented by the 20- and 50-EMAs at 0.6827 adds to the downside filters.
  • A (20.00-40.00) bearish range shift by the RSI (14) adds to the downside filters.

The AUD/USD pair is displaying topsy-turvy moves in the Asian session. The asset has auctioned in a tad lower range of 0.6732-0.6746 amid a lackluster movement in the US dollar index (DXY). On Monday, the major remained vulnerable after surrendering the critical support of 0.6760. The asset recorded a fresh two-year low of 0.6716.

The break of the Darvas Box formation results in a volatility expansion in the counter. The above-mentioned chart pattern formed in a wider range of 0.6761-0.6900 from the first trading session of July.

A bear cross by the 20- and 50-period Exponential Moving Averages (EMAs) at 0.6827 adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more losses ahead. The momentum oscillator RSI (14) is not displaying any sign of divergence and oversold.

Should the asset drop below Monday’s low at 0.6713, the greenback bulls will drag the asset towards the 29 May 2020 high at 0.6683. A breach of the latter will drag the asset towards the 30 April 2020 high at 0.6570.

On the contrary, the greenback bulls could lose their grip if the asset violates July 5 high at 0.6896. An occurrence of the same will drive the asset towards June 30 high at 0.6920, followed by June 28 high at 0.6965.

AUD/USD hourly chart    

      

    

 

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