AUD/USD technical analysis: Bears await a sustained break below 0.6800 neckline support
- Remains depressed despite growing optimism over a partial US-China trade deal.
- The recent failure constituted towards the formation of a bearish double-top pattern.
The AUD/USD pair struggled for a firm directional bias and seesawed between tepid gains/minor losses on the first day of a new trading week, shrugging off growing US-China trade optimism.
From a technical perspective, the pair’s recent pullback from the 0.6880-90 supply zone seemed to have constituted towards the formation of a bearish double-top pattern on the daily chart.
The pullback, however, stalled just ahead of the 0.6800 neckline support, which if broken will confirm the bearish formation and set the stage for a further near-term depreciating move.
Meanwhile, technical indicators on hourly charts have been gaining negative traction but maintained their bullish bias on the daily chart, which seemed to be the only factor lending some support.
Hence, it will be prudent to wait for a sustained breakthrough the mentioned support before placing any aggressive bearish bets and positioning for a slide towards mid-0.6700s support area.
On the flip side, the 0.6855 region – marking 100-day SMA – now becomes immediate strong resistance and is followed by the 0.6880-90 hurdle, which if cleared might negate the bearish set-up.
Sustained strength beyond the 0.6900 handle might prompt some additional short-covering move towards the key 0.70 psychological mark with some intermediate resistance near the 0.6930 region.
AUD/USD daily chart
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
