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AUD/USD Price Analysis: Drops below 0.6550, invalidating bullish breakout

FX Street
Updated:
  • AUD/USD has fallen back below 0.6550 amid broad-based USD demand. 
  • The pair has invalidated the bullish breakout confirmed on Wednesday.

AUD/USD is losing altitude with markets buying the safe-haven US dollar on China’s decision to impose a controversial security law on Hong Kong. 

The AUD/USD pair is now trading near 0.6540, representing a 0.36% decline on the day. The pair’s drop below 0.6550 has invalidated the bullish symmetrical triangle breakout confirmed by Wednesday’s 0.96% gain. 

The bull failure would be confirmed if the pair ends Friday below 0.6550. That will likely invite stronger chart-driven selling, possibly leading to a re-test of support at 0.64, which restricted downside on May 14 and May 15. 

Chart analysts consider failed breakouts as a powerful bearish reversal signal. 

On the higher side, 0.66 is the level to beat for the bulls. The pair failed to close above that level remained elusive on Wednesday and Thursday. 

Daily chart

Trend: Bearish

Technical levels

 

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