Forex: Sellers to get the upper hand on AUD/USD this week?

FXstreet.com (Barcelona) - In the days ahead, AUDUSD will most likely be one of the most interesting pairs to keep an eye on from a technical perspective. After an immaculate 2.5 months rally, which has managed to net over 1000 pips since its maturity kick-started back on June 1st, the latest price action seen on Friday (commanding bearish outside day) and the level it closed below, 1.0435, suggests sellers may be starting to outnumber buyers.

Will they get the upper hand in the days/weeks ahead? According to Chris Capre, Founder at 2ndSkies, the market starts to look the most vulnerable since the rally started. Chris notes it is the fourth time price has closed below the daily 20ema, pointing that "while each time it did this (close below 20ema), the next day was an up day or bull close, for some reason, this time looks a little different."

Why? As Chris notes, "this is the deepest penetration and close on the other side since this channel for starters, but its also the longest pullback of the 4 so far, telling us the bears were able to hold the bulls back for a longer period of time." If the channel holds, Chris suspects "the downside should be kept in check between 1.0360/1.0390-ish." However, if that fails, 2nd skies Founder "expects further unwinding with 1.0242 and 1.0175 coming under pressure."