- AUD/USD is testing a critical resistance on the daily chart.
- The bears are lurking at a 50% mean reversion resistance level.
AUD/USD is a compelling scenario from a technical standpoint. As per the prior series of analyses, AUD/USD Price Analysis: Bears take charge, carving out the path to a new daily low, while below resistance on the daily chart, there is a bias to the downside.
AUD/USD daily chart
The above illustrates a bearish bias. The price is bounded by support and resistance but a break of support would be expected to confirm the downside towards the 0.6700 area.
However, the four-hour chart offers a number of potential scenarios, as follows:
The price could be on the verge of a break of the dynamic trendline resistance and horizontal resistance which could lead to a breakout of the wedge pattern that is in formation, contrary to the downside bias. A rising wedge pattern such as this is actually a bearish formation:
The scenario above is a fakeout of the dominant trendline resistance, while below, the bears are committing to within the trendline resistance.