Long term On the H4 time frame, a big inverted head and shoulders pattern is seen, indicating a potential long term bullishness.
Short term AUDUSD has displayed interesting price action, indicating potential bearish momentum in the near term. Here's a breakdown of the short term analysis:
1. Intraday Consolidation and Sign of Weakness: AUDUSD experienced a period of consolidation around 0.68956 -0.68705, suggesting indecision in the market. However, signs of weakness emerged during this phase, indicating that sellers might have been gaining control.
2. Rally Without Strength and Failed Resistance Test: Despite the consolidation, the pair attempted to rally to the upside. However, the rally lacked conviction and failed to reach the resistance zone, signaling a lack of buying power. As a result, sellers took the opportunity to overpower the buyers, leading to the establishment of a crucial supply level.
3. Break of Support Zone: The bears succeeded in breaking below the significant support zone located around 0.68496. This breakout is a bearish signal, suggesting that sellers are gaining control of the market. Considering the analysis, the outlook for AUDUSD leans towards a potential further decline to the 0.68040.
Traders should keep a close eye on price action, especially during the retest of the broken support. If the retest confirms the newfound resistance, it would add more credibility to the bearish scenario.