AUD/USD head and shoulders top attracting some attention

Technical Analysis

On the daily chart as shown below … what do the technical analysts think of this one?

As far as H&S go this does seem nice and textbook-like. 

NZD and AUD have fallen out of favour as 

  • oil prices have dropped
  • renewed coronavirus waves hit Europe and elsewhere

calling into question the ‘commodity supercycle’ on the back of the reflation trade that had become so popular in the past couple of months. 

Yesterday’s housing affordability moves in New Zealand have taken the steam out of short term rate expectations, and even long bonds in NZ are falling in yield. 

A break of around 0.7550 would confirm this as a H&S … it would be after a more than 450 point drop from the February high so I can’t say its exciting me too much. 

Comments welcome. 

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