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Technical Analysis – AUDUSD consolidates after validating double-top pattern
July 18, 2023 2:28 pmVideo
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AUDUSD had been re-gaining ground in the four-hour chart after its recent decline ceased at 0.6594. However, this recent rebound got rejected near the June high of 0.6898, with the price forming a double-top pattern before retracing lower.
This latest pullback is also confirmed by the momentum indicators. Specifically, the stochastics are descending after posting a bearish cross and the MACD is retreating further towards zero, while remaining well below its red trigger line.
Should the recent pullback extend, the price could initially test 0.6782, which is the 61.8% Fibonacci retracement of the 0.6898-0.6594 downtrend. Slicing through that zone, the pair might test the 50.0% Fibo of 0.6746, which coincides with the 50-period simple moving average (SMA). A break below that zone could trigger a retreat towards the 38.2% Fibo of 0.6710.
Alternatively, if the pair reverses back upwards, the 78.6% Fibo of 0.6833 may cap the pair’s upside. Failing to halt there, the price might challenge the double-top region of 0.6898. Even higher, the 123.6% Fibo of 0.6970 could be the next barrier for the bulls to clear.
In brief, AUDUSD has remained flat in the past few four-hour sessions after retreating lower due to the formation of a double-top pattern. To validate a broader downside correction, the pair needs to pierce through the 50-period SMA.
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