Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
AUD Technical Outlook: AUD/USD Continues to Work Towards Breakout Pattern

AUD Technical Outlook: AUD/USD Continues to Work Towards Breakout Pattern

Paul Robinson,
What's on this page

AUD/USD Technical Outlook

  • AUD/USD validated trend-line from October
  • Price action continues to narrow towards apex of wedge

AUD Technical Outlook: AUD/USD Continues to Work Towards Breakout Pattern

Last week, AUD/USD reversed hard off the trend-line from October, with a key reversal setting up Aussie for a move lower. The reversal off the trend-line validated the it for the first time since coming into existence. This is setting up for a technical formation to continue to mature.

Between the trend-line from October and big horizontal support dating to October 2018, a descending wedge is starting to come into view. It will take some more time to develop and may not even create an opportunity until as far as April.

But the makings of a solid pattern are there, it just may require some patience before we have anything we can do with it. A decline back down to the 7000-line, which aside from being a psychological level has real meaning otherwise.

The most recent lows in December and January were carved out emphatically around that level. If price continues to wedge lower and ultimately break in the direction of the trend, a tendency descending wedges have, then we could see a big rush lower.

If, however, we don’t see that be the case there could still be a powerful breakout to the upside. The nature of these patterns is that vol ebbs and flows and that with a contraction in volatility (and price), one way or another it will inevitably rise again and see price make a strong move.

For now, traders may only be left with very short-term opportunities as the contraction in price action continues. The more it contracts the fewer the opportunities will be until a breakout develops. A break above the trend-line with confirmation above the Feb 10 high at 7248 could spark a bit of a rally towards 7314 and the confluent 200-day moving average/one-year downtrend line. This would negate the continued development of the pattern.

AUD/USD Daily Chart

AUD/USD daily chart

AUD/USD Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.