On the daily chart below for AUDUSD, we can see that the price has recently sold off from the top of the range and it’s now approaching the support at 0.6563. AUDUSD has been trading within this range since the Silicon Valley Bank collapse in March, so it hasn’t done much for 3 months now.

The USD recently started to appreciate across the board as strong economic data suggest that the Fed may have to do more on the interest rates front and the market is slowly pricing in higher and higher chances of another hike in June.

AUDUSD Technical Analysis

On the 4 hour chart below, we can see that once the price broke below the trendline, the sellers piled in aggressively. We got a bounce recently that ended up in a continuation from the 38.2% Fibonacci retracement level as expected. The AUD/USD price has now started to diverge with the MACD and since we are near the bottom of the range, this may be an early signal of a weakening bearish momentum that will translate into a correction from the 0.6563 support.

On the 1 hour chart below, we can see that the price action has formed a falling wedge pattern. When the price breaks out to the upside, it generally rallies to the top of the pattern, which in this case would be the 0.67 handle. AUD/USD needs to break below the 0.6537 support with conviction and supported by fundamentals to invalidate this pattern and lead to an even stronger selloff.

Meanwhile, the bearish bias remains, and we should see the price getting to the 0.66 support first and 0.6563 after. Watch out for the US PMIs today as a beat should give the USD another boost, while a miss should weaken it.