- The path of least resistance for AUD / USD appears to the downside.
- The rally in the US dollar and weak Chinese inflation weigh on the AUD.
- Breakout of a confirmed bearish wedge on the daily chart.
AUD / USD is consolidating its latest move to seven-month lows of 0.7409 as bears take a breather in anticipation of further momentum.
The pair came close to testing the 0.7400 level after Chinese inflation figures came in below expectations. The pair’s downward movement has also been supported by a rally in the US dollar alongside Treasury yields.
The pair now awaits further updates on the covid and risk trends for a new move.
From a short-term technical perspective, the daily chart of the currency pair points to additional losses, especially after bears confirmed the break to the downside of a falling wedge pattern on Thursday.
Therefore, a breakout of the daily lows would point to a test of the 0.7400 level, below which the December low of 0.7338 could be tested.
The 14-day RSI is just above the oversold region, currently at 31, which suggests there is more room for the decline.
The selling momentum gained traction after the 21-day moving average broke through the 200 SMA from above, charting a bearish crossover earlier this week.
AUD / USD daily chart
On the other hand, the AUD bulls need a daily close above the wedge support, now turned into resistance, at 0.7472 in order to negate short-term bearish momentum.
Higher up, Thursday’s high of 0.7495 will challenge bullish engagement.
AUD / USD additional levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
