- AUD/USD bulls testing critical resistance within a bearish territory.
- The bears have not thrown in the towel just yet.
The price is breaking out of the downward trend in a rising wedge formation. While this is typically regarded as a bearish continuation chart pattern, the Aussie has a habit of defying gravity when correcting the trend and a break of the current resistance would be a significant development. There is a void between there and the 0.73 figure and the price imbalance could well be mitigated.
AUD/USD H4 charts
On the other hand, the bears are moving in and repeated failures at this resistance level would be expected to leave the ball in their court. A subsequent break of the next term support would be expected to encourage the bears back to the table and a snowball effect gathering momentum could result in a downside continuation and restest of the counter trendline:
A break of the trendline and a run on sell stops would be expected to result in supply that could push the bulls back to the edge of an abyss at 0.6950:
AUD/USD daily chart
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