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  • The recent pullback managed to find some support ahead of 0.6800 handle.
  • The recent failure constituted towards a bearish double-top pattern formation.

Having failed to capitalize on its recent recovery move from multi-year lows, the AUD/USD pair this week witnessed a modest pullback from the 0.6880-90 supply zone and formed a bearish double-top pattern on the daily chart.
The pullback, however, stalled just ahead of the 0.6800 horizontal support, which if broken will confirm the bearish formation and set the stage for a further near-term depreciating move towards mid-0.6700s support area.
Meanwhile, technical indicators on hourly charts have just started gaining negative traction, albeit have managed to hold in the bullish territory on the daily chart and seemed to be the only factors that helped limit the downside.
Hence, it will be prudent to wait for a sustained break through the mentioned horizontal support to confirm a bearish breakdown and placing any aggressive bearish bets amid optimism over a possible US-China trade deal.
On the flip side, the 0.6855 region – marking 100-day SMA – now becomes immediate strong resistance to clear and is followed by the 0.6880-90 strong hurdle, which if cleared might negate any near-term bearish outlook.
Sustained strength beyond the 0.6900 handle might prompt some additional near-term short-covering move and lift the pair towards the key 0.70 psychological mark with some intermediate resistance near the 0.6930 region.

AUD/USD daily chart