The AUDUSD has an inverted head and shoulder setup.

On July 31st, the AUDUSD was my “Chart of the Day.” Yesterday, I focused on the AUDNZD. Today, back to the AUDUSD once again. Frankly, if a trend looks like it may extend, for different reasons, we should point it out.

Today, the AUDUSD closed above the descending trend line that has been formed since January 13th, and the close above the .7140 level may allow for a move higher as we have formed a complex inverted head and shoulder pattern. The risk is for a move all the way back to the 200dma in the coming weeks. There is a potential for a 200+ pip move in the pair which would be the measured move from the head (January 28th low to the neckline at .7208).

Blake Morrow