AUD/USD is having trouble making latest 2024 highs.

Does this mean that Aussie traders are ready for a bearish reversal?

We’re taking a more in-depth take a look at the 4-hour timeframe!

AUD/USD 4-hour Forex Chart by TradingView

The U.S. dollar has been losing pips to its major counterparts as more traders expect the Fed to chop its rates of interest (perhaps by as much as 50 bps) in September.

Despite that, the Australian dollar has been having trouble making latest 2024 highs against the U.S. dollar for the past few days.

One possible reason is China’s weaker-than-expected reports, which fuel global growth concerns and limit the demand of “risk” currencies just like the Aussie.

Keep in mind that directional biases and volatility conditions in market price are typically driven by fundamentals. Suppose you haven’t yet done your homework on the U.S. and Australian dollars, then it’s time to envision out the economic calendar and stay updated on day by day fundamental news!

AUD/USD, which found resistance on the .6800 psychological handle, is forming what looks like a Head and Shoulders pattern within the 4-hour timeframe.

Are we a bearish reversal within the making?

A pair more of those bearish wicks and candlesticks below the 100 SMA and .6700 psychological handle opens AUD/USD to a move to the .6685 Head and Shoulders “neckline.”

If this support test leads to consistent trading below the “neckline,” we could even see a downside breakout which will take AUD/USD right down to the .6630 previous area of interest.

An prolonged upswing for AUD/USD isn’t out of the query, nonetheless. If the pair finds a catalyst and enough bullish momentum to bust through the .6750 inflection point, the pair could head for higher areas of interest like .6800 or latest 2024 highs.

Whichever bias you find yourself trading, be sure to make use of your best risk management moves and to follow your trading plan so you’ll be able to trade for an additional day irrespective of how this setup seems!