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AUD/USD Testing a Rising Wedge Support

AUD/USD started the month falling to a new low on the year at 0.7532. Th 4H chart shows that the pair started to consolidate and eventually formed a rising wedge pattern.

AUD/USD 4H Chart 4/10

(click to enlarge)

The latest high in this wedge was just under 0.7740.This is around a previous support/resistance pivot area. Also, the 4H RSI was cracking 60, and did not clear it, outside of the intrasession time-frame. Furthermore, price retreated back below the 200- and 100-period SMAs. These technical developments suggest that while the market is choppy, it is still bearish in the medium-term.

As we get into the 4/10 US session, AUD/USD is testing the noted wedge support, which is reinforced by the 50-period SMA. So far, traders in the New York session supported the pair. This could lead to another leg within this correction pattern, and this is where we should watch the bullish attempt A failure to push above 0.738 would be a strong indication that bulls in the short-term have lost steam. In this scenario, the medium-term bearish mode might be revived. A break below 0.7625 should be a confirmation of this bearish continuation scenario, which would have the 0.7532-0.7560 support area in sight, with risk of at least falling to 0.75.