AUD/USD (daily chart) has broken down tentatively below a large rising wedge formation that has been in place since the October 1.0150 area low. This breakdown of the wedge pattern occurs after price has been unable for the past week to breach the important 1.0450 upside resistance level, which was also around the 61.8% Fibonacci retracement of the last major bearish run from the September 1.0600 area high down to the October 1.0150 area low. The wedge breakdown has placed AUD/USD near both the 200-day moving average and the key 1.0300 level to the downside. In the event of a further breakdown below the 1.0300 area, price could move towards yet another downside re-test of the key 1.0150 price region, in which case it could be positioned for a possible run down towards parity (1.0000).
James Chen, CMT
Chief Technical Strategist
FX Solutions
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