AUD/USD technical analysis: 0.6670 trigger level
AUD/USD technical analysis highlights that a bearish head and shoulders pattern with substantial downside potential has been activated. Watch out for further losses towards the 0.6500 level.
The Australian dollar continues to consolidate around the 0.6700 level against the US dollar, as fears surrounding the effect of the coronavirus on the Australian economy are keeping the upside in the pair contained.
AUD/USD analysis shows that a loss of the 0.6670 level could provoke a heavy technical sell-off towards the 0.6500 level.
AUD/USD medium-term price trend
The Australian dollar is struggling to recover against the US dollar, with both fundamental and technical factors weighing on the pair.
Traders are acutely aware that the coronavirus could have serious consequences for the Australian economy. Furthermore, this weeks RBA meeting minutes said that that low interest rates will need to be maintained for longer.
AUD/USD technical analysis shows that the pair remains technically bearish and is vulnerable to further losses towards the 0.6600 level.
Price is continuing to create bearish lower lows, and is placing the current 2020 yearly low, at 0.6660, back in focus.
The daily time frame shows that a loss of the 0.6660 level could cause price to move to the bottom of a falling wedge pattern, which is currently found around the 0.6600 level.
Overall, traders have few reasons to be bullish towards the AUD/USD pair while price trades below the 0.6800 level.
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AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair remains under pressure over the short-term while price trades below the 0.6755 support level.
The four-hour time frame shows that a bearish head and shoulders pattern has been activated, following the decline below the 0.6755 level.
Buyers have also had one failed attempt to move back above the neckline of the bearish pattern. The rejection has placed the emphasis on more losses below the 0.6700 level.
The downside projection of the bearish pattern could see the AUD/USD pair testing the 0.6500 level, and possibly the 0.6450 level.
It is also noteworthy that bullish MACD divergence is still present on the mentioned time frame.
The divergence extends towards the 0.6840 level, and could help to form a final right-hand shoulder to complete the bearish pattern if a recovery were to take place.
AUD/USD technical summary
AUD/USD analysis shows that losses towards the 0.6500 level remain possible why price trades below the 0.6755 level. Sellers should be mindful that positive MACD divergence is still present on the lower time frames.