- AUD/USD bulls seeking an upside continuation may need to be patient.
- The daily chart is offering a bearish formation and eyes are on the prior resistance.
AUD/USD is on the front foot as the US dollar takes a knock on the Nonfarm Payrolls disappointment. However, the technical outlook argues the case for a correction according to the daily chart.
The following is a top-down analysis that illustrates the bullish case from a monthly and weekly perspective and the bearish bias from a daily point of view.
Monthly chart
The price has rallied this month so far and is showing prospects of a continuation towards the resistance structure.
Weekly chart
The weekly chart shows a bullish reverse head and shoulders as the price it pressures the neckline.
Daily chart
The daily chart, however, is looking overstretched and the W-formation is a bearish pattern where the price would be expected to test the prior resistance and the confluence of the 38.2% Fibonacci retracement.