The AUD/USD currency pair has been trading within a short-term rectangle formation, with the bears taking control and driving prices below the key level of 0.6700. Despite early week gains, the bears remain in control as downbeat oscillators suggest further downside momentum.
Bearish Consolidation Continues:
The AUD/USD pair remains within a 40-pip rectangle formation, marked by multiple levels since the last Friday. The RSI (14) line remains steady, below the median line of late. However, the clear downside break of a fortnight-old ascending trend line and the 200-Hour Moving Average (HMA) joins the bearish MACD signals to keep Aussie bears hopeful.
Potential for Further Downside:
If the AUD/USD price remains bearish past the trend continuation pattern’s lower line of 0.6665, a break of which could quickly direct the sellers towards the monthly low of 0.6620. In a case where the bears remain in control, the 0.6600 round figure and the yearly low marked in March around 0.6560 could be potential targets.
On the flip side, the rectangle’s top line of 0.6710 precedes the 200-HMA level of 0.6720 to restrict the short-term recovery of the AUD/USD pair. The previous support line stretched from April 11, near 0.6725 can act as the last defense of the AUD/USD bears. If the buyers manage to break through, a one-week-old horizontal resistance area between 0.6770 and 0.6780 can challenge the upside momentum.
CURRENCY PAIR: AUD/USD
CURRENT TREND: Bearish
ENTRY PRICE: Below 0.6665
TAKE PROFIT: 0.6560
STOP LOSS: Above 0.6725
The AUD/USD currency pair has been in a bearish trend, with the recent consolidation below the key level of 0.6700 indicating further downside momentum. Downbeat oscillators and bearish MACD signals add to the bearish sentiment.
Based on the current technical analysis, it is recommended to sell the AUD/USD pair below the trend continuation pattern’s lower line at 0.6665, with an exit price at the yearly low of 0.6560. A potential stop loss can be placed above the previous support line stretched from April 11, near 0.6725.
Traders should monitor the price action closely and adjust the stop loss accordingly. The timeframe for this trade can be short-term, with a potential timeframe of a few days to a couple of weeks.