AUDUSD Bearish Breakout – Macro and Technicals AlignAUDUSD has broken below a rising wedge formation on the 4H chart, signaling a bearish continuation. With the Reserve Bank of Australia pausing rates and weak local data weighing on sentiment, while the Federal Reserve maintains a hawkish hold due to sticky labor costs, this trade sets up well both technically and fundamentally. I'm watching for downside continuation toward 0.6379 and potentially 0.6350. The bearish bias is invalidated on a move above 0.6475.
🔍 Technical Analysis
Structure: Price broke down from a rising wedge and continues forming bear flags — each followed by further selling pressure.
Current Price Action:
Rejected sharply at ~0.6475 (last swing high)
Confirmed breakout with downside momentum
Key Support Levels:
0.6379 – minor structural support
0.6350 – major support zone from April
Resistance / Invalidation:
Above 0.6475 – would break the bearish structure and negate the setup
Bias: Bearish — clean structure, breakout momentum, and sustained lower highs
🌏 Fundamental Context
🇦🇺 Bearish AUD Drivers:
Weak domestic data:
Building Approvals: -8.8% vs -1.7% forecast
RBA on hold:
No rate hike in sight; cautious due to housing and China concerns
China slow-down:
PBOC cut rates and reduced reserve requirements — signals broader economic softness
🇺🇸 Bullish USD Drivers:
Fed holding firm:
Benchmark rate held at 4.25–4.50%
Labor costs surged +5.3% q/q
Productivity dropped -0.4%, reinforcing inflation concerns
Market repricing rate cuts:
Cuts now expected later in 2025 or even 2026
Political pressure from Trump:
Despite attacks on Jerome Powell, Fed appears unmoved
Trump teasing a “major trade deal” — potentially USD-positive if credible
🎯 Trade Setup
Entry Area: Watching 0.6420–0.6435 as a pullback zone for potential shorts
Target Levels:
First target: 0.6379
Second target: 0.6350
Stop Loss: Placed above 0.6475 (last swing high) to protect against false breakouts
Trade Thesis:
Technical structure supports downside continuation
Macro fundamentals favor USD strength and AUD weakness
Clean reward-to-risk if structure holds
🧭 Conclusion
AUDUSD setup is supported by a strong confluence of technical breakdown and macro divergence. With the Fed staying firm and the RBA cautious amid weak data, the fundamentals validate the bearish trend. As long as price stays below 0.6475, the outlook remains bearish, with 0.6379 and 0.6350 as the next logical levels. Caution around U.S. data releases or trade deal news is advised, but the path of least resistance remains downward.
