Inverse Head and Shoulders Formation in Play for AUD/USD

In today’s technical analysis, let’s focus on the Australian Dollar to American Dollar (AUD/USD) pair, which has experienced significant fundamental influences. Earlier today, the pair was already impacted by better-than-expected job data from Australia. However, the excitement is not over yet, as we are still waiting for retail sales data from the US, which will be released in less than two hours. The outcome of that report will undoubtedly bring further volatility to this instrument.

From a technical perspective, the pair is currently forming an inverse head and shoulders pattern, signaling a potential bullish reversal. The job data from Australia fueled the completion of the “head” of this formation, and now the pair is working on finishing the right shoulder. The key level to watch is the orange horizontal resistance, which acts as the neckline of this formation.

Additionally, the price is testing the green downtrend line, adding further significance to the current level. If the price closes today above both the green downtrend line and the yellow horizontal resistance, it will provide a strong buy signal and confirm the bullish reversal. Conversely, if the price bounces lower and fails to break these levels, it could be a signal to sell.

Source: https://www.axiory.com/analytics/technical-analysis/inverse-head-and-shoulders-formation-in-play-for-a