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Australian Dollar forms Bearish Head & Shoulders

Australian

Looking at the benchmark AUD/USD currency exchange rate on the above hourly MT 4 price action chart, the Australian dollar (AUD) is under pressure and has fallen nearly 0.30 percent during the early Asian trade session as the weekend is about to start.

Also, the Australian dollar has fallen to an intraday low at 0.7744 before recovering a bit. On Thursday, the AUD/USD Forex market lost 0.40 percent. The weakness being seen with the Australian currency could be from the broad oversold bounce being seen with the U.S. dollar (USD).

Today the U.S. non-farm payroll (NFP) report for the month of December will be released. In the United Kingdom, British Prime Minister Boris Johnson is assuring that all citizens of the UK will be vaccinated for the coronavirus.

However, new coronavirus cases are surging and a new national lockdown is in effect. There are also two new “mutant” strains of Covid-19. One from Britain and another from South Africa. Over 1.29 million citizens of the United Kingdom have been vaccinated to date.  

In the United States, the day after pro-Trump protesters stormed the Congressional Hill, U.S. House Speaker Nancy Pelosi and Democratic Minority Leader Charles Schumer are now demanding that President Donald Trump be impeached.

They also want Trump and removed from office for inciting violence in the American Capitol. There is also talk of using the 25th Amendment to remove him office just 13 days from Biden being sworn in from both political parties.

Daily Australian Dollar Technical Analysis (AUD/USD)                  

Looking at the above hourly MT 4 price action chart, the AUD/USD currency exchange rate appears to be forming a bearish head and shoulders chart pattern. Neckline support is lining up at 0.7725.

A daily close below 0.7725 opens the door to challenge the next downside barrier that lines up at 0.7628.

On the upside, a daily close above today’s Asian session high price point lining up at 0.7773 opens the door to challenge the Wednesday high price point at 0.7820 next.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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