On the daily chart below for
AUDUSD, we can see that the price has recently sold off from the top of the
range and it’s now approaching the support at 0.6563. AUDUSD has been
trading within this range since the Silicon Valley Bank collapse in March, so
it hasn’t done much for 3 months now.

The USD recently started to
appreciate across the board as strong economic data suggest that the Fed may
have to do more on the interest rates front and the market is slowly pricing in
higher and higher chances of another hike in June.

AUDUSD Technical Analysis

On the 4 hour chart below, we can
see that once the price broke below the trendline, the sellers piled in
aggressively. We got a bounce recently that ended up in a continuation from the
38.2% Fibonacci
retracement level as expected. The AUD/USD price has now
started to diverge with the MACD and since we are near the bottom
of the range, this may be an early signal of a weakening bearish momentum that
will translate into a correction from the 0.6563 support.

On the 1 hour chart below, we can
see that the price action has formed a falling
wedge pattern. When the price breaks out to the upside, it generally rallies
to the top of the pattern, which in this case would be the 0.67 handle. AUD/USD
needs to break below the 0.6537 support with conviction and supported by
fundamentals to invalidate this pattern and lead to an even stronger selloff.

Meanwhile, the bearish bias remains,
and we should see the price getting to the 0.66 support first and 0.6563 after.
Watch out for the US
PMIs today as a beat should give the USD another boost, while a miss should
weaken it.

This article was written by ForexLive at www.forexlive.com.