AUDUSD Price Analysis: At make or a break around the 200-EMA

• Aussie bulls are weak despite a recovery in risk-off mood as Australian consumer inflation expectations soar.
• An establishment of the major below the 200-EMA may activate a bearish reversal.
• The RSI (14) has shifted into the bearish range which signals that the downside momentum is active.

The AUDUSD pair is underperforming against other risk-perceived currencies after a higher-than-projected release of consumer inflation expectations in Tokyo. The asset is hovering near the round-level support of 0.6400 in the early European session and has diverged to a negative correlation with US Treasury yields.

The 10-year US Treasury yields are continuously refreshing day’s low and are trading below 4.07%, at the press time. Meanwhile, the US dollar index (DXY) has refreshed its day’s low at 110.17 amid a recovery in positive market sentiment.

On an hourly scale, the asset has witnessed a steep fall after failing to sustain above the horizontal resistance placed from October 27 high at 0.6522. The major is hovering around the 200-period Exponential Moving Average (EMA) at 0.6427. This could be a make or a break move as an establishment below the mighty 200-EMA will trigger a bearish reversal.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the downside momentum is active.

The Greenback bulls will remain in a dominant position if the asset drops below Monday’s low at 0.6406, which will drag the asset towards October 31 low at 0.6368. A slippage below the latter will exploit the asset to display more downside to near November 3 low at 0.6272.

On the flip side, a break above Tuesday’s high at 0.6551 will drive the asset towards the round-level resistance at 0.6600, followed by September 21 high at around 0.6700.

AUDUSD hourly chart