AUDUSD Price Analysis: Test of an inverted H&S breakout looks likely around 0.6550

The AUDUSD pair has witnessed modest exhaustion in the upside momentum after printing a fresh six-week high of 0.6632. An upside bias for the asset is still solid as the market mood is jubilant after a noteworthy decline in the US inflation data.

Bets for a fifth consecutive 75 basis point (bps) rate hike by the Federal Reserve (Fed) are vanishing and the US dollar index (DXY) and yields on US government bonds are getting punished. Meanwhile, trading activity in the US could be on reduced volume as US markets will remain closed on Friday on account of Veterans Day.

On a four-hour scale, the asset has delivered a breakout of the Inverted Head and Shoulder chart pattern that signals a bullish reversal after a prolonged consolidation. The neckline of the aforementioned chart pattern is plotted from October 4 high at 0.6548.

The 50-and 200-period Exponential Moving Averages (EMAs) are on the verge of delivering a golden cross, which will further strengthen the antipodean.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates more upside ahead.

Going forward, a test of the Inverted H&S neckline at 0.6548 will trigger a bargain buy and will drive the asset toward Thursday’s high at 0.6632, followed by the round-level resistance at 0.6700.

Alternatively, a decline below Thursday’s low at 0.6386 will drag the asset toward October 14 high at 0.6347. A downside break of October 14 high will expose the asset for more downside toward November 3 low at 0.6272.

AUDUSD four-hour chart