An inverted head-and-shoulders pattern can lift the AUD toward 0.6950s

The AUDUSD tests the 100-day EMA, propelled by an inverted head-and-shoulders chart pattern.
Once the head-and-shoulders pattern is achieved, the AUUSD could extend its gains toward the 200-day EMA.

The AUDUSD is rallying sharply in the North American session and challenges the 100-day Exponential Moving Average (EMA) at 0.6701. Fundamental factors, but also an inverted head-and-shoulders chart pattern in the AUDUSD daily chart, underpinned the Australian Dollar (AUD), which is gaining 1.24%. At the time of writing, the AUDUSD is trading at 0.6701 after hitting a daily low of 0.6577.

AUDUSD Price Analysis: Technical outlook

The AUDUSD daily chart depicts the AUD clearing the inverted head-and-shoulders neckline on Thursday, November 11. It should be noted that during that day, the AUDUSD registered a daily low of 0.6412. But a softer US Consumer Price Index (CPI) report lifted the AUDUSD, which rallied almost 190 pips.

At the time of typing, the AUDUSD probes the 100-day EMA, which, once cleared, could pave the way for further gains. Traders should be aware that the Relative Strength Index (RSI) is at bullish territory. So the path of least resistance in the AUDUSD is upward biased.

The AUDUSD’s first resistance would be the 100-day EMA at 0.6701. The break above will expose the 0.6800 psychological mark, followed by the inverted head-and-shoulders target at 0.6870. However, a breach of the latter will pave the way toward key resistance areas like the September 13 swing high at 0.6916 and the 200-day EMA at 0.6956.