AUD/USD Technical Analysis: Trapped in falling channel, hits session lows on risk aversion

Trapped in a falling channel, the AUD/USD pair is currently trading at the session low of 0.7143 amid risk aversion in the equity markets.

4-hour chart

The pair has charted a descending broadening channel on the 4-hour chart. The RSI is biased bearish below 50.00.

The lower edge of the channel, currently at 0.7121, could be put to  test in the next few hours as the International Monetary Fund’s (IMF) downward revision of global growth forecasts has not gone down well with the investor community. This is evident from the risk aversion in the Asian stocks. The futures on the S&P 500are also reporting a 0.54 percent drop.

Further, fading prospects for US-China trade accord could keep the risk assets under pressure.

Channel breakdown (a move below 0.7121), if confirmed, would imply an end of the corrective bounce from the recent lows below 0.70.   Meanwhile, the upper edge of the channel, currently at 0.72, is the level to beat for the bulls.

Trend: Bearish