AUD/USD – the pair is likely to fall towards yearly lows!

As we expected the dollar continue to appreciate against other major currencies and for the beginning of the trading week we decided to provide a trading insight on one of the commodity pairs – the AUD/USD cross. The Australian dollar has been under a heavy fundamental pressure due to the low oil prices and this could be clearly seen on the daily chart.

Moreover, from a technical point of view, we spot a huge bearish engulfing pattern with several other technical structures that suggest the bear’s dominance. After the pair has confirmed a broken triangle pattern, the prices have moved in a corrective sideways wedge and we expect given the huge bearish candle that occurred last Friday we expect the down movement to continue.

In a mid-term perspective, my forecast is that the prices will head towards the prior lows at 0.6830 as the long-term bears will try to push for another low. The scenario could only change if we see a bullish move that extends above 0.7260. However, for now, there aren’t any technical signs that the bulls may trigger a rally.