AUDUSD Continues Developing the Major Head and Shoulders Pattern
The Right Shoulder of the broader structure represents a false breakout above the 23.6 per cent Fibonacci retracement level at 0.77690, which was followed by a dropdown below this crucial resistance.
As of late, the price action has been consolidating below this psychological barrier and the 100-day MA (in blue), which underpins the ongoing transition of the underlying market sentiment (from bullish to bearish).
The emergence of a Shooting Star candle and a subsequent Bearish Marabozu (following the release of today's GDP data) further underscores the growing bearish bias in the market.
The first target for this new downtrend is encapsulated by the 38.2 per cent Fibonacci retracement level at 0.76201, which serves as a neckline of the broader H&S pattern. Notice that it is currently being crossed by the 150-day MA (in orange), which serves as a floating support.
If the price manages to break down below 0.76201 decisively, the next target would naturally be the 61.8 per cent Fibonacci retracement level at 0.73794. However, such a dropdown may take some time to unfold because the Stochastic RSI indicator currently signals that the AUDUSD may already be oversold in the short term.
As of late, the price action has been consolidating below this psychological barrier and the 100-day MA (in blue), which underpins the ongoing transition of the underlying market sentiment (from bullish to bearish).
The emergence of a Shooting Star candle and a subsequent Bearish Marabozu (following the release of today's GDP data) further underscores the growing bearish bias in the market.
The first target for this new downtrend is encapsulated by the 38.2 per cent Fibonacci retracement level at 0.76201, which serves as a neckline of the broader H&S pattern. Notice that it is currently being crossed by the 150-day MA (in orange), which serves as a floating support.
If the price manages to break down below 0.76201 decisively, the next target would naturally be the 61.8 per cent Fibonacci retracement level at 0.73794. However, such a dropdown may take some time to unfold because the Stochastic RSI indicator currently signals that the AUDUSD may already be oversold in the short term.
