Aussie bears are at it again! And if this selling pressure keeps up, AUD/USD could head towards its range support while AUD/CAD could hit the bottom of its rising wedge.
Happy Pip has been talkin’ about this range setup for quite some time, and I think we’re finally seeing some confirmation that AUD/USD is setting its sights on the range support at .7175.
Price also recently broke below the neckline of a short-term double top and the moving averages dynamic support, signaling that a selloff is underway. The 100 SMA is below the 200 SMA so the path of least resistance is to the downside, and the chart pattern is around 200 pips tall so the resulting drop could be of the same size.
However, stochastic is still in the process of pulling up from the oversold area, which means that buyers might be able to put up a fight. If so, the area of interest around the middle of this range could hold as a floor and push AUD/USD back up to the top.
I’ve shown y’all a channel pattern on AUD/CAD’s 1-hour time frame, but zooming out to this pair’s daily chart reveals that a larger wedge formation has materialized.
Price just bounced off the wedge resistance, indicating that sellers could be able to push price back to support just above the 1.0000 major psychological level. Stochastic is turning down from the overbought zone to signal that buyers want to take a breather at this point.
Still, the 100 SMA is above the longer-term 200 SMA on this long-term chart so buyers might be able to keep this wedge pattern intact or even trigger an upside breakout from the 1.0350 resistance. Note that the formation is approximately 800 pips tall so the resulting trend could last by the same amount.