- AUD/USD struggled to gain traction and remained confined in a range above mid-0.7700s.
- Failures near the 0.7815-20 area constitute the formation of a bearish multiple-tops pattern.
- Bears might still wait for a sustained break below the 0.7700 mark before placing fresh bets.
The AUD/USD pair lacked any firm directional bias and remained confined in a narrow trading band, above mid-0.7700s through the first half of the European session.
The US dollar built on the previous day’s modest bounce from over two-month tops and strengthened a bit for the second consecutive session on Friday. A softer risk tone was seen as a key factor that benefitted the safe-haven USD and capped gains for the perceived riskier aussie.
From a technical perspective, repeated failures near the 0.7815-20 hurdle now seemed to constitute the formation of a bearish multiple-tops on short-term charts. The reversal pattern, however, is not complete until key support near the 0.7700 round-figure mark is broken.
Meanwhile, technical indicators on the daily chart are holding in the bullish territory but have been struggling to gain any meaningful traction. This further makes it prudent to wait for a sustained move in either direction before positioning for a firm near-term trajectory.
A convincing break below the 0.7700 handle will confirm a breakdown and accelerate the fall towards 0.7660. Some follow-through selling should pave the way for additional weakness and has the potential to drag the AUD/USD pair towards the 0.7600 round-figure mark.
On the flip side, the 0.7800 mark now seems to act as an immediate hurdle ahead of the 0.7815-20 key barrier. A convincing breakthrough will negate the negative outlook and set the stage for a move towards testing March monthly swing highs, around mid-0.7800s.
Some follow-through buying will shift the bias back in favour of bullish traders and pave the way for additional gains. The AUD/USD pair might then aim to reclaim the 0.7900 mark before darting towards the 0.7965-70 region en-route the key 0.8000 psychological mark.