- AUD/USD witnessed an intraday turnaround from the 61.8% Fibo. level resistance.
- The pullback constitutes the formation of a classic bearish double-top chart pattern.
- A sustained break below the 0.7130 region needed to confirm a fresh bearish break.
The AUD/USD pair faced rejection near the 61.8% Fibonacci level of 0.7346-0.7005 recent fall, forming a classic bearish double-top pattern near the 0.7210 region. A subsequent slide below 100-hour SMA – for the first time in over a week – was seen as a key trigger for bearish traders.
Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again started drifting back into the negative territory on hourly charts, adding credence to the negative outlook. That said, bearish traders might still need to wait for a sustained break below the 0.7130 region before confirming that the AUD/USD pair might have topped out in the near-term.
Some follow-through selling below 100-day SMA, around the 0.7045 region, should pave the way for additional weakness. The AUD/USD pair might then accelerate the fall towards the 0.7100 mark en-route 23.6% Fibo. level, around the 0.7085 region. The downward trajectory could further get extended and drag the pair back towards the recent swing lows, around the key 0.7000 psychological mark.
On the flip side, the 0.7200-0.7210 region (61.8% Fibo. level) might continue to act as immediate strong resistance. A convincing breakthrough will negate the bearish set-up and trigger some short-covering move, which might push the AUD/USD pair towards the 0.7300 mark. Bulls might then aim back towards the 0.7370-75 supply zone before lifting the pair back towards the 0.7400 mark.
AUD/USD 1-hourly chart
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Technical levels to watch
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