AUD/USD: Aussie stalls against dollar

AUD/USD may break out below its short-term wedge

From a technical perspective, the risk/reward ratio is clearly shifting back in favor of the sellers as AUD/USD forms an ascending wedge pattern. This chart pattern shows that buyers are running out of steam and may precede major bearish reversals or simple breathers.

However, it would be preferable to wait for an exit from the bottom of this wedge to possibly position itself on the downside of the Australian dollar. If this is the case, a return to the low of the year towards $0.62 is expected.

Pressure on the Aussie may increase in the coming weeks as the macro may remain at the center of attention in the coming weeks, after being pushed to the background in October and November to price the Fed tapering and the reopening of China.

A continued deterioration of the global economy will increase the chances of a further decline in major currencies against the US dollar, particularly the Australian dollar, which is an extremely cyclical currency.

Entry: Sell below $0.67
Stop: $0.68
Target: $0.62
Risk/reward ratio: 5

Follow the price action of the AUD/USD pair with IG.


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