Technically, AUD/USD was strongly bullish and it was expected to reach new highs, but the unexpected USDX's rebound has boosted the greenback which it has appreciated aggressively versus its rivals.
AUD/USD is trading in the red at the time of writing and is located right below the uptrend support. Still, the breakdown needs confirmation before we could consider going short on this pair.
- AUD/USD Breakdown Through Confluence Area?
AUD/USD has failed to reach and retest the median line (ML) and now it looks very heavy and helpless. It has fallen below the lower median line (LML) of the ascending pitchfork, below the Pivot Point (0.7156) level, and under the median line (ml) of the descending pitchfork.
If the breakdown will be validated by another strong bearish candle of by a retest of the broken levels, AUD/USD could extend and accelerate its current drop. Practically, we may have a reversal if the price stabilizes outside the ascending pitchfork's body. This scenario could be achieved if the USDX resumes its rally.
- AUD/USD Trading Tips
AUD/USD is trading in a confluence area right now, so anything could happen. Sell a valid breakdown if the currency pair closes below the 0.7144 level and if it stabilizes below the median line (ml) and below the lower median line (LML). Actually, a strong selling signal will appear after closing below the S1 (0.7123) level.
You should keep in mind that the price is trading in a support area, a false breakdown, reversal pattern (bullish engulfing) will announce another bullish momentum. When a breakout through a confluence area is invalidated, the price will move in the opposite direction.
