FX.co ★ AUD/USD bearish reversal still possible

The AUD/USD pair is trading lower at the time of writing. The price action developed a bearish reversal pattern. Still, this formation is far from being confirmed. The pair is trading at 0.7482 and it seems very heavy as the Dollar Index rebounded.

DXY reached 97.73 major downside obstacle and now it tries to rebound. Fundamentally, the Aussi was punished by the Chinese data in the early morning, the Manufacturing PMI indicator dropped from 50.2 to 49.4 points below 49.7 expected signaling contraction, while the Non-Manufacturing PMI was reported at 48.4 points below 50.3 expected and versus 51.6 in the previous reporting period. The Australian Building Approvals came in better than expected, while the Private Sector Credit came in line with expectations.

Later, the US data could be decisive. The Core PCE Price Index is expected to report a 0.4% growth, the Unemployment Claims could grow from 187K to 195K, while the Chicago PMI is expected at 56.9 above 56.3 in the previous reporting period. Furthermore, Personal Income and Personal Spending will be released as well.

AUD/USD Double Top!

AUD/USD failed to take out the 0.7536 resistance or to stabilize above the descending pitchfork's upper median line (uml) signaling strong bearish pressure. The price developed a potential Double Top pattern. Still, this formation could be activated if the rate makes a new lower low.

As you already know from my previous analysis, AUD/USD could develop a strong downside movement only if it makes a valid breakdown below the weekly pivot point of 0.7470 and below 0.7456.

AUD/USD Forecast!

Dropping and closing below 0.7456 could activate a larger drop and could bring new short opportunities. As long as it stays below the upper median line (uml), AUD/USD could develop a corrective phase.