AUDUSD Daily Analysis: Bearish Continuation Towards New Lows

AUDUSD is showing increasing signs of weakness after breaking below a key support level, which has now turned into a potential resistance area. The current market structure suggests that the pair may be developing a larger bearish trend with further downside potential in the coming sessions.

Support Has Turned Into Resistance

On the daily timeframe, AUDUSD has broken below the important support area near 0.6990. Following the breakdown, this level is now acting as a potential swap zone where previous support may become new resistance.

This support-to-resistance transition is often an early indication of a shift in market sentiment. As long as price remains below this zone, sellers are likely to maintain control of the market.

Elliott Wave Structure Supports a Bearish Outlook

From an Elliott Wave perspective, AUDUSD appears to be forming a five-wave bearish sequence.

• Wave (i) initiated the first decline.
• Wave (ii) completed a corrective rebound.
• Wave (iii) is expected to produce a stronger impulsive move lower.
• Wave (iv) may generate a temporary recovery toward the swap zone.
• Wave (v) could then extend the bearish trend and push the pair to fresh lows.

The current wave count suggests that the broader downside movement may still be in its early stages.

Momentum Signals Growing Selling Pressure

The momentum indicator at the bottom of the chart has moved back into negative territory, reflecting increasing bearish pressure.

This development suggests that bullish momentum is fading while sellers are regaining control. Unless momentum improves significantly, the probability of further downside remains elevated.

Key Scenario to Watch

In the near term, AUDUSD may attempt a corrective bounce toward the swap zone before sellers return to the market.

If price fails to break back above this resistance area, the bearish trend is likely to continue. A confirmed rejection from the swap zone would strengthen the case for another impulsive move lower.

A break below the recent swing low would provide additional confirmation that the downtrend remains intact.

Price Outlook

The preferred scenario remains bearish while price trades below the swap zone.

Any recovery toward resistance may provide selling opportunities for traders looking to align with the broader trend. If the Elliott Wave count remains valid, AUDUSD could continue lower and establish new lows over the coming days or weeks.

Conclusion

AUDUSD is displaying a weakening technical structure after losing a key support level on the daily timeframe. The newly formed swap zone has become a critical area to monitor.

As long as price remains below this resistance, bearish momentum is expected to dominate. The current Elliott Wave structure continues to support the possibility of further declines and the formation of new lows in the near future.