Friday, September 09, 2016

AUD/USD Tested the Pennant Trendline It Broke Below and Continued Falling

AUD/USD tested the support trendline of the pennant that formed between 26th May to 26th August 2016 after it broke below it and today the pair continued falling.

The limit of the figure you can see on the chart is, as we know, the height of the pennant at its base, projected from the breakout level to the downside.

That means that AUD/USD will drop at least 380 – 390 pips from the breakout level at 0.7607, in other words, it should reach at least 0.7230.

Since such a drop would mean that the pair would break below the support trendline of the correction that began at the beginning of January 2016 (the dark-blue line), that could signal a renewal of the bearish trend.