AUD/USD technical analysis: 0.6615 key pivot
AUD/USD technical analysis shows that a strong bounce has occurred from the 0.6300 level, with both a head and shoulders pattern and a wedge pattern reaching their overall downside targets. A potential long-term bottom may now be in place.
The Australian dollar spiked to its lowest level against the US dollar since 2009 on Monday, after oil prices collapsed by around 30 per cent.
AUD/USD analysis indicates that the pair remains under downside pressure while trading below the pivotal 0.6615 level.
AUD/USD medium-term price trend
The Australian dollar suffered extreme volatility against the US dollar on Monday, with the pair crashing towards the 0.6300 level.
The AUD/USD pair showed promising signs last week, following a strong technical bounce from the just above the 0.6430 level.
AUD/USD technical analysis continues to highlight a large falling wedge pattern on the daily time frame as absolutely key for the pair going forward.
The daily time frame shows that the wedge is located around the 0.6615 level, and remains the central focus for AUD/USD traders.
It is possible that a more sustainable recovery may take hold, as the wedge pattern has already played out to the downside, following Monday’s plunge towards the 0.6300 handle.
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Overall, watch for a potential recovery in the AUD/USD pair if bulls can anchor price above the 0.6615 level. The sharp bounce from the 0.6300 handle earlier this week is somewhat encouraging.
AUD/USD short-term price trend
AUD/USD technical analysis highlights that the pair has a negative short-term trading bias while the price trades below the 200-period moving average on the four-hour time frame, around the 0.6680 level.
The four-hour time frame shows a bearish head-and-shoulders pattern, with the neckline of the pattern located around the 0.6675 level.
The head-and-shoulders pattern breakout across the mentioned time frame has played out to the downside, following Monday’s plunge to the 0.6300 level.
More short-term volatility is expected, key support is currently located at the 0.6500 and 0.6430 level, key resistance is found at the 0.6675 and 0.6750 levels.
AUD/USD technical summary
AUD/USD analysis shows that bearish patterns across the lower and higher time frames have now played out to the downside. Watch out for a strong recovery if the pair anchors its price above the 0.6615 level.
