The AUDUSD has had an impressive run since last November.
That’s when I mentioned the break from consolidation near 0.7160.
What followed was an 850 pip rally.
However, the selloff between the 25th and 26th of February was incredibly aggressive.
It erased twelve days of gains in just two sessions.
Since then, the Australian dollar has struggled.
On top of that, the AUDUSD is carving what could be a bearish pin bar today after getting rejected from 0.7800.
That pin bar appears to be the right shoulder of an early-stage head and shoulders pattern.
Just keep in mind that the pair needs to close a day below the neckline near 0.7650 to confirm the bearish reversal pattern.
If that occurs, we could see the AUDUSD trend lower toward the 0.7300 region.
That’s approximately the measured objective of the (potential) head and shoulders in the chart below.
Key support on the way down includes 0.7520, 0.7400, and, of course, the measured objective near 0.7300.
Alternatively, a move above Thursday’s high of 0.7850 would negate the idea.
Disclosure: I hold an AUDUSD short position.