A potential minor bearish breakdown looms on the AUD/USD. The recent short-term price action of the AUD/USD for the past five weeks since 22 April has started to evolve into an impending minor bearish reversal head and shoulders configuration, which increases the odds of a minor bearish breakdown at this juncture.Select here to enlarge chart
30 May 2021 at 1:30pm SGT
Source: CMC Markets
- If the 0.7800 short-term pivotal resistance is not surpassed to the upside and a break below 0.7690 (the neckline support of the bearish head & shoulders), this is likely to trigger a short-term down move to target the next intermediate support zone of 0.7530/7485 (the 1 April swing low, and the 0.764 Fibonacci expansion of the down move from the 25 February high to 1 April low, projected from the 10 May high and 200-day moving average).
- On the flipside, a four-hour close above 0.7800 invalidates the bearish scenario for a squeeze up to retest the long-term secular descending trendline in place since the July 2011 high and the 10 May minor swing high, which is defined by the resistance zone at 0.7890/7940.