AUD/USD technical analysis: bullish divergence points to 0.6840
AUD/USD technical analysis indicates that the pair is likely to correct towards the 0.6840 to 0.6880 area before the next down move in the pair occurs
The AUD/USD pair has recently started to recover from the 0.6680 support level as risk-on sentiment returns to financial markets.
AUD/USD analysis shows that sharp reversal from the 0.7000 resistance level has created substantial amounts of bullish MACD price divergence.
AUD/USD medium-term price trend
The Australian dollar received a strong boost this week as the Reserve Bank of Australia kept interest rates on hold and fears about the spread of the coronavirus started to subside.
AUD/USD technical analysis shows that the pair has a strong negative medium-term bias while price trades below the 0.6860 level.
The daily time frame shows the presence of a large falling wedge pattern, with the top of the price channel now located around the 0.6800 level.
A false bullish breakout above the channel took place in December as the AUD/USD pair briefly tested above the 0.7000 handle.
The daily time frame shows that the bottom of the wedge pattern is currently located around the 0.6650 level.
A break under the wedge pattern could expose the AUD/USD pair to heavy downside selling towards the 0.6300 level.
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AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair is heavily bearish over the short term while trading below the 0.6868 level.
The one-hour time frame indicates that a bullish upside correction is likely to occur, due to the presence of a bullish reversal pattern and positive MACD price divergence.
Looking at the size of the bullish reversal pattern on the mentioned time frame, a rally above the 0.6776 level could trigger a one-hundred upside rally in the AUD/USD.
Further evidence of a coming bullish correction is also on display, due to the presence of positive MACD price divergence.
The MACD price divergence is present on the one-hour time frame and extends towards the 0.6840 level.
AUD/USD technical summary
AUD/USD analysis shows that a bullish correction towards the 0.6840 level may occur over the short term, due to the presence of a bullish reversal pattern and positive MACD price divergence.