Downtrend continues but almost oversold

• AUD/USD resumes its autumnal descent after a brief pullback. 
• The pair is close to oversold levels, however, with increased risks of a recovery evolving. 

AUD/USD continues its October fall after a brief pull back. The pair is in a short and medium-term downtrend which, given the technical maxim that “the trend is your friend” is likely to extend south. 

AUD/USD Daily Chart

Despite the recent run of weakness, the Aussie pair is very close to reaching oversold levels (below 30) according to the Relative Strength Index (RSI) momentum indicator. If it enters oversold on a closing basis it will be a sign advising short holders not to add to their bearish bets as there is an increasing risk of a recovery. The pair looks a little over extended and the meat of the decline appears to have run its course. 

Support from previous key lows lies at 0.6465 – 0.6475 (May 1 swing low, cluster of closes in early August), and if the pair falls to that level it will probably bounce, consolidate or possibly even reverse trend.