AUD/USD: Decline could extend on failure to overcome 0.6850 – SocGen

AUD/USD formed a Head and Shoulders and has embarked on a phase of pullback. Failure to recapture 0.6850 could trigger fresh selling, analysts at Société Générale report.

Below 0.6550, next potential support aligns at 0.6400

“AUD/USD confirmed a Head and Shoulders and almost achieved the target at 0.6550 last month. It has staged a bounce and is attempting a break above the 200-DMA. Neckline of the pattern at 0.6850 is short-term resistance. If the pair fails to overcome this, the decline could extend.” 

“First support is at 0.6680/0.6650, the 50% retracement of the rebound. Break below could mean extension in downtrend towards 0.6550 and 0.6400, the 76.4% retracement from last October.”