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.