The AUD/USD has been trending lower, albeit at a slow and steady pace. Technically, support at 0.7670 has given way, and a bearish head-and-shoulders top has formed in the near term. According to Benjamin Wong, Strategist at DBS Bank, “we should expect a near-term consolidation with a minor negative bias and an effort to break lower on the year-to-date ranges.”
“With AUD mild bearish vibes wearing a bearish head-and-shoulders top pattern, support rising from 0.7532 has been limited at a 0.7670 bypass. With the timescales to follow (i.e. the RBA following the Fed and remaining dovish until then), we believe there are two sides of the bread to spread the butter for both bears and bulls.”
“The bullish cloud support on the weekly Ichimoku chart remains strong, with 0.7446 as a critical level.”
“A dropped-down resistance line from 0.8007 shows AUD has some work to do if it tries anything near 0.7813 in the short term. As a result, we’re at most in a period of range narrowing, but with a near-term downward bias (the medium term remains questionable on a turning point basis). A 61.8 percent Fibonacci retracement of the range since November places a decline towards 0.7378; naturally, a breach of support layered in the 0.7463-0.744 range is required “”Repair.”
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