Technical Analysis – AUDUSD retraces lower after forming double top pattern
July 24, 2023 3:27 pm
AUDUSD has been on the retreat again after its latest bullish breakout from the rectangle pattern encountered resistance at 0.6898, validating a double top pattern. In the near term, the pair’s decline has temporarily paused at the congested region that includes the 200-day SMA and the upper bound of the Ichimoku cloud.
This latest pullback is also confirmed by the momentum indicators. Specifically, the RSI declined below its 50 neutral mark, while the MACD retreated beneath its red signal line in the positive territory.
Should the recent pullback extend, the price could initially test the 0.6716 fortified zone. If that barricade fails, the spotlight could turn to the recent support of 0.6594 before the floor of the recent rangebound pattern at 0.6563 gets tested. Dipping lower, the pair could descend towards the 2023 bottom of 0.6457.
Alternatively, if the pair bounces off the 200-day SMA and edges higher, the upper border of the rectangle at 0.6817 could curb any upside attempts. A jump above that zone could trigger an advance towards the double-top region of 0.6898. Conquering this barricade, the price might face the 0.7030 hurdle.
In brief, AUDUSD remains stuck within its sideways pattern after upside attempts got rejected at the double top region of 0.6898. To confirm a broader downside correction, the pair needs to pierce through the 200-day SMA.
AUDUSD has been on the retreat again after its latest bullish breakout from the rectangle pattern encountered resistance at 0.6898, validating a double top pattern. In the near term, the pair’s decline has temporarily paused at the congested region that includes the 200-day SMA and the upper bound of the Ichimoku cloud.
This latest pullback is also confirmed by the momentum indicators. Specifically, the RSI declined below its 50 neutral mark, while the MACD retreated beneath its red signal line in the positive territory.
Should the recent pullback extend, the price could initially test the 0.6716 fortified zone. If that barricade fails, the spotlight could turn to the recent support of 0.6594 before the floor of the recent rangebound pattern at 0.6563 gets tested. Dipping lower, the pair could descend towards the 2023 bottom of 0.6457.
Alternatively, if the pair bounces off the 200-day SMA and edges higher, the upper border of the rectangle at 0.6817 could curb any upside attempts. A jump above that zone could trigger an advance towards the double-top region of 0.6898. Conquering this barricade, the price might face the 0.7030 hurdle.
In brief, AUDUSD remains stuck within its sideways pattern after upside attempts got rejected at the double top region of 0.6898. To confirm a broader downside correction, the pair needs to pierce through the 200-day SMA.
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