Is AUDUSD gearing up for a 220-pip drop?
In today’s video, I explain why the Australian dollar could be heading lower and provide an update on the US Dollar Index (DXY).
The Australian dollar broke down last week, alongside other majors like EURUSD and GBPUSD.
Although the DXY remains in a sideways range, currency pairs like AUDUSD have shown considerable weakness, breaking key technical structures.
In last weekend’s forecast, I mentioned how Friday’s close flipped the 0.6700 region to new resistance.
It also confirmed a potential intraday head and shoulders pattern.
Fast forward to today, and AUDUSD is now testing the lower part of this resistance area.
As shown in the chart, 0.6700 acted as key resistance for AUDUSD in May and June before a liquidity sweep occurred in July.
I remain relatively bearish on AUDUSD while it’s below the 0.6700 region on a daily closing basis.
Key support levels are 0.6580, followed by the 0.6450 region.
Remember, long wicks on higher time frames often act as magnets.
Take note of the Australian dollar’s long lower wick from August 5th, which remains largely unfilled.
That lower daily wick is my target for the coming weeks and will remain in play as long as 0.6715 holds as resistance.
