Is this a head and shoulders pattern on the 4-hour chart of the AUD/USD pair?
Better be prepared in case the pair breaks below this neckline!
How far do you think this Australian pair could fall?
AUD/USD Forex 4 Hours Chart by TradingView
The Australian dollar appears to be struggling to maintain its rally, as risk aversion flows back into the markets and weighs on higher yielding assets.
Meanwhile, the US dollar was able to draw support from the Federal Reserve's hawkish rhetoric, as policymakers recently discussed the possibility of keeping US borrowing costs high for longer.
Does this mean that AUD/USD is about to reverse soon?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on the USD and AUD yet, it's time to check the economic calendar and stay up to date with daily fundamental news!
I see that the head and shoulders pattern has completed on the 4-hour chart of the pair, and a test of the neckline support at the key psychological mark at 0.6600 appears to be underway.
A break below this level could confirm that a downtrend of the same height as the pattern, extending around 150 pips, may follow.
The upcoming US GDP release could determine which direction the USD pair heads, so be sure to check our site Events guide This is a first-class news event!