A bearish technical pattern appears on the AUDUSD

Graphic of trading data chart
A bearish technical pattern appears on the AUD/USD

The US Dollar was bearish against most of its major pairs on Monday with the exception of the CHF and JPY. On the economic data front, no major economic data was released. On Tuesday, Housing Starts for April are expected to fall to 904K on month, from 1,216K in March.                                                   

The Euro was bullish against most of its major pairs with the exception of the NZD, AUD and CAD. In Europe, the Bank of England's Chief Economist Andy Haldane said BOE is looking at monetary policy options, including negative interest rates and purchasing riskier financial assets. In the meantime, European Union chief negotiator Michel Barnier said, after the latest round of E.U. and U.K. trade talks, "no progress had been made on the most difficult issues" and he was "still determined but not optimistic."

The Australian dollar was bullish against all of its major pairs. 

Using the “technical Insight” research tool under the Market Analysis tab, I searched for currency pairs that confirmed any classic technical reversal patterns and a bearish continuation wedge pattern as been identified on the AUD/USD daily chart. 

Source: GAIN Capital

After a temporary interruption, the prior downtrend is set to continue.

A Continuation Wedge (Bearish) represents a temporary interruption to a downtrend, taking the shape of two converging trendlines both slanted upward against the trend. During this time the bulls attempt to win over the bears, but in the end the bears triumph as the break below the lower trendline signals a continuation of the prior downtrend. 

The MACD (Moving Average Convergence Divergence) indicator has also confirmed a bearish signal as the indicator crossed below its signal line. 

Key resistance can be seen at the 0.6565 level. 

Happy Trading
Related tags: Forex

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