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0.7005 Is the Key for the AUD/USD Pair As It Trades Within a Bear Flag Pattern

December 6, 2021

 

Talking Points:

  • Within a bearish chart pattern, the AUD/USD consolidates recent losses.
  • Bulls are being tested by the monthly resistance line and the 200-day simple moving average (SMA).
  • The relative strength index (RSI) suggests that the market will continue to push southward.
  • The low from November 2020 acts as additional support around 0.6825.

The AUD/USD currency pair struggles to correct its fall from a yearlong low, retreating to 0.7015 in the European session today. On the 30-minute chart, the Australian dollar is displaying a short-term bearish pattern known as a bear flag, up 0.17 % intraday at the time of writing.

However, the RSI line suggests that the price will consolidate further before confirming the formation with a bearish breach of 0.7005 support.

The November 2020 low around 0.6990 is also adding to the bearish viewpoint.

If the pair falls below 0.6990, it becomes exposed to the 0.6825 support level potentially.

Meanwhile, recovery moves remain uncertain below the stated flag’s upper line, which is currently around 0.7035.

A downward sloping trend line from the 1st of December and the 200-day SMA, around 0.7050 and 0.7100, are also posing headaches for the AUD/USD bulls.

AUD/USD 30-Minute Chart:

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