AUD/USD Price Analysis: Falling wedge breakdown calls for more downside

AUD/USD’s path of least resistance appears to the downside.
The US dollar rebound; weak Chinese inflation weigh on the aussie.
Falling wedge breakdown confirmed on the aussie’s daily chart.

Dhwani Mehta FXStreet

AUD/USD is consolidating the latest leg down to seven-month lows of 0.7409, as the bears take a breather, awaiting fresh trading impetus.

The aussie almost tested the 0.7400 mark after the Chinese inflation figures disappointed. The down move was also endorsed by a rebound in the US dollar alongside the Treasury yields amid risk reset.

The pair now looks forward to fresh covid updates and risk trends for fresh trading.

From a near-term technical perspective, the currency pair’s daily chart points to more losses, especially after the bears confirmed a downside break of the falling wedge formation on Thursday.

Therefore, a breach of the daily lows would call for a test of the 0.7400 level, below which the December low of 0.7338 could be probed.

The 14-day Relative Strength Index (RSI) sits just above the oversold region, currently at 31.06, suggesting that there is more room for the downside.

The selling momentum gained traction after the 21-Daily Moving Average (DMA) pierced through the 200-DMA from above, charting a bear cross earlier this week.

AUD/USD daily chart

To the upside, the AUD bulls need a daily close above wedge support-turned-resistance at 0.7472 in order to negate the near-term bearish momentum.

Thursday’s high at 0.7495 will then challenge the bulls’ commitments.

AUD/USD additional levels to watch

AUD/USD

Overview
Today last price	0.7420
Today Daily Change	-0.0010
Today Daily Change %	-0.13
Today daily open	0.743

Trends
Daily SMA20	0.7555
Daily SMA50	0.7673
Daily SMA100	0.7698
Daily SMA200	0.7578

Levels
Previous Daily High	0.7496
Previous Daily Low	0.7416
Previous Weekly High	0.7603
Previous Weekly Low	0.7445
Previous Monthly High	0.7794
Previous Monthly Low	0.7477
Daily Fibonacci 38.2%	0.7446
Daily Fibonacci 61.8%	0.7465
Daily Pivot Point S1	0.7398
Daily Pivot Point S2	0.7366
Daily Pivot Point S3	0.7317
Daily Pivot Point R1	0.7479
Daily Pivot Point R2	0.7528
Daily Pivot Point R3	0.756

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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