Overnight we saw the first comments from new Federal Reserve Chairman Jerome Powell. He was upbeat on the state of the US economy, which made the experts think that rate hikes are on the way. That lead to a rally in the USD. At the same time, the majors took some heat. With none more so than the Aussie.

The AUD/USD has been weak in recent times. And the fall on Tuesday was nothing more than a continuation of the already strong downtrend. As readers would know, we have a long-term sell signal out on the AUD/USD which is performing well.

Now as we prepare for a looming rate rise in the US in March, the question needs to be asked, where will the AUD/USD end up?

Head and Shoulders Pattern

Looking at the charts we can see what appears to be a head and shoulders pattern forming. That would confirm what we are thinking, in that the Aussie is headed lower.

0.7786 appears to be the very bottom of this range and we are only now tagging that level. It also means that we are expecting a similar level of downside.

That would put us at around the 0.7650-0.7700 range that we have previously discussed. So regardless, it’s hard to see a bullish case for the AUD/USD just yet.

AUD/USD- 240 min Chart.