February 5, 2023

Stays above two-week-old support, focus on 0.7290

  • AUD/USD bounces off short-term support line to refresh intraday high.
  • Upper line of rising wedge challenges immediate advances.
  • Firmer RSI, successful break of 200-SMA favor buyers inside bearish chart pattern.

AUD/USD posted around 6.0% yearly losses despite providing a positive end to 2021, up 0.10% intraday near 0.7275 during Monday’s Asian session. The corrective pullback, however, struggles to overcome the rising wedge bearish chart pattern. The bull’s exhaustion could also be witnessed from the RSI conditions lingering around the overbought region. Hence, pullback moves seem to be brewing.

Though, a clear downside break of a two-week-old ascending support line, near 0.7255, becomes necessary for the seller’s entry.

Following that, a south-run to the late December’s swing low around 0.7200 becomes imminent. However, the 200-SMA and tops marked during late November to early December, offer strong support to challenge the pair’s further weakness near 0.7170.

Adding to the downside filter is the support line of the stated monthly rising wedge, near 0.7160, a break of which will theoretically make it vulnerable to plunge towards the last yearly bottom of 0.6993.

Alternatively, an upside clearance of the wedge’s resistance, near 0.7285, acts as an immediate hurdle for the AUD/USD buyers to crack, which in turn rejects the bearish formation and directs prices further north towards the mid-November tops surrounding 0.7370.

AUD/USD: Four-hour chart

Trend: Further upside expected


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