AUD/USD Retraces Back Into Rectangle After Failed Breakout
2023.06.22 06:07
AUDUSD managed to cross above its rectangle pattern and post a fresh four-month peak of 0.6898 in the past week. However, this advance proved to be short-lived and the pair quickly fell back within its recent range, trading flat in the last couple of daily sessions.
The momentum indicators are reflecting a loss of positive momentum. The RSI is ticking down slightly above its 50-neutral mark, while the MACD is softening but remains positive and above its red signal line.
Should the price extend its recent correction, the 0.6716 hurdle could act as the first line of defense. Failing to halt there, the pair could descend towards 0.6622 before the spotlight turns to the floor of the range at 0.6563. A violation of the latter might open the door for the 2023 bottom of 0.6457.
On the flipside, if the bulls manage to regain the upper hand, they could propel the price towards 0.6817, which is the upper end of the rectangle pattern. Conquering this barricade, buyers could aim at the four-month high of 0.6898. Clearing that zone, the pair may then challenge the 0.6920 barrier.
Overall, AUDUSD corrected to the downside after its recent advance ran out of steam. Nevertheless, for the pullback to extend, the price needs to drop below the converging 50- and 200-day simple moving averages (SMAs).
