AUD/USD Testing Lower Limit of Monthly Symmetrical Triangle Patt

Following two consecutive months of upside for the AUD/USD, things have, for lack of a more technical phrase, ‘gone pear-shaped’ for the currency pair in January. Month to date, the unit is down -3.7%, and has reclaimed the entire month of gains provided in December and is already beginning to chew away at November’s upside move.

Monthly Symmetrical Triangle

What’s technically appealing from a longer-term perspective on the monthly chart is the symmetrical triangle formed between $0.8007 and $0.5506 (you may often hear traders correctly refer to this formation as a coil); you will note that price movement is currently testing the lower side of this pattern structure, an ascending level complemented by a descending line-turned-potential support (taken from the high of $0.7661).

While a bullish response from here is certainly on the table, traders are also urged to note that the Relative Strength Index (RSI) recently rejected the lower side of the 50.00 centreline, a move indicating negative momentum for this timeframe (average losses exceeding average gains).