The AUD/USD pair comes under heavy selling pressure on Tuesday and continues losing ground through the first half of the European session. Spot prices drop back closer to the monthly low touched last week, with bears now awaiting a sustained beak below the 0.6600 round-figure mark before placing fresh bets. The fundamental backdrop suggests that the path of least resistance for spot prices is to the downside. Some follow-through selling below the 0.6600 mark will reaffirm the negative bias and make the AUD/USD pair vulnerable to challenge the YTD low, around the 0.6565 region touched in March.

AUD/USD has formed an Inverted Head and Shoulder chart pattern on an hourly scale, which advocates a bullish reversal after a long consolidation. The Aussie asset is expected to witness a significant upside after a breakout of the neckline plotted from May 17 high at 0.6690.

The 20-period Exponential Moving Average (EMA) at 0.6650 is providing support to the Aussie bulls.

Also, the Relative Strength Index (RSI) (14) is making efforts for shifting into the bullish range of 60.00-80.00 after which a bullish momentum will get triggered.

A confident acceptance above the neckline plotted from May 17 high at 0.6690 will send the Aussie bulls firmly toward the round-level resistance at 0.6800 followed by February 06 low at 0.6855.

In an alternate scenario, US Dollar bulls will flex their muscles if the Aussie asset will drop below March 15 low at 0.6590. An occurrence of the same will expose the asset to March 08 low at 0.6568 followed by 02 November 2022 high around 0.6500.

AUDUSD under selling pressure

May 23 2023