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

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

Omkar Godbole FXStreet Contributor

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

1. R3 0.6647
2. R2 0.6624
3. R1 0.6594
PP 0.6571
1. S1 0.6542
2. S2 0.6519
3. S3 0.6489

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD remains cautious near 1.1760 ahead of US data

EUR/USD trades marginally on the defensive at the end of the week, hovering around the 1.1770-1.1760 band against the backdrop of an equally humble advance in the US Dollar. Meanwhile, investors gear up for the release of key US data later in the day, including PCE and GDP figures.

GBP/USD looks slightly bid near 1.3480, focus on US docket

The British Pound gathers some fresh steam on Friday, prompting GBP/USD to reverse four consecutive days of losses and revisit the 1.3480 zone. Cable’s decent bounce comes on the back of modest gains in the Greenback prior to the release of significant US data.

Gold extends the recovery past $5,000/oz, looks at US data

Gold prices advance for the third straight day on Friday, reaching new multi-day highs just north of the key $5,000 mark per troy ounce. The continuation of the precious metal’s uptick follows steady geopolitical effervescence in the Middle East, while traders eagerly await key US data releases.

US GDP growth expected to slow down significantly in Q4 after stellar Q3

The United States Bureau of Economic Analysis will publish the first preliminary estimate of the fourth-quarter Gross Domestic Product at 13:30 GMT. Analysts forecast the US economy to have expanded at a 3% annualized rate, slowing down from the 4.4% growth posted in the previous quarter.

Week ahead – Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness.

Official Trump price approaches breakout with mixed signals from traders

Official Trump (TRUMP) is trading at $3.50 at the time of writing, approaching its upper consolidation range. A breakout from this range could open the door for an upside move. On-chain data shows market indecision, with balanced flows between bulls and bears, signaling a lack of clear directional bias.