AUD/USD Price Analysis: Bears could be on the prowl for the open

AUD/USD is testing a critical resistance on the daily chart.
The bears are lurking at a 50% mean reversion resistance level.

Ross J Burland FXStreet

AUD/USD is a compelling scenario from a technical standpoint. As per the prior series of analyses, AUD/USD Price Analysis: Bears take charge, carving out the path to a new daily low, while below resistance on the daily chart, there is a bias to the downside.

AUD/USD daily chart

The above illustrates a bearish bias. The price is bounded by support and resistance but a break of support would be expected to confirm the downside towards the 0.6700 area.

However, the four-hour chart offers a number of potential scenarios, as follows:

AUD/USD H4

The price could be on the verge of a break of the dynamic trendline resistance and horizontal resistance which could lead to a breakout of the wedge pattern that is in formation, contrary to the downside bias. A rising wedge pattern such as this is actually a bearish formation:

The scenario above is a fakeout of the dominant trendline resistance, while below, the bears are committing to within the trendline resistance.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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