- The AUD/USD pair extended its sideways consolidative price action through the early European session on Friday and remained well within a broader trading range.
- The range-bound price action over the past two weeks or so now seemed to have constituted towards the formation of a rectangular chart pattern on short-term charts.
A rectangle is usually s continuation pattern that forms as a trading range during a pause in the trend – bearish in this case – though sometimes can also mark a significant trend bottom and thus warrant caution before placing any aggressive bets for any further near-term depreciating move.
Meanwhile, the trading range support is pegged near the 0.6740 region, which if broken will reaffirm the bearish bias and turn the pair vulnerable to accelerate the slide towards the 0.6700 handle before eventually dropping to 0.6675 region – a decade low set earlier this August.
On the flip side, any attempted recovery might now confront an intermediate resistance near the 0.6775 region but the top end of the trading range – around the 0.6800 handle – might continue to act as a key barrier and turn out to be a key pivotal point for the pair’s near-term trajectory.
Sustained move beyond the mentioned hurdle, leading to a subsequent move beyond the 0.6820 region now seems to prompt some aggressive short-covering move and lift the pair further towards the 0.6900 handle with some intermediate resistance near the 0.6875-80 region.
AUD/USD 4-hourly chart
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