Weekly chart shows bearish Tweezer Top nearly confirmed

• AUD/USD rose to the top of its long-term range, formed a bearish Tweezer Top and has weakened. 
• This is a bearish sign that suggests a reversal down is set to unfold. 

AUD/USD rose up to the top of its range during the summer in a three-wave ABC pattern (see chart) and then formed a bearish Tweezer Top Japanese candlestick reversal pattern on the weekly chart (orange-shaded circled on chart).

AUD/USD Weekly Chart 

This pattern occurs at the end of an up move when two consecutive bars peak at the same or a similar level and both have a similar length “wick”. The wick is the range that sticks out above the full body of the candle. The two candlest taken together thus resemble a “tweezer”. 

In the following week the pair has sold off, so far, and assuming the week ends as a red down candlestick (today is Friday), it will provide added bearish confirmation for the Tweezer Top. 

The long-term trend is sideways since the pair has been moving in a range for over a year. Given the principle that “the trend is your friend” the odds favor a continuation of this trend. In this case, this would imply the next move ought to be a down leg back towards the range floor. 

A break below 0.6701 (week’s lows) would provide bearish confirmation to an initial target at the cluster of major moving averages at between 0.6645 and 0.6632. 

A further break below the bottom of wave B at 0.6622 would probably signal an even deeper sell-off down to a target at 0.6400 and the range lows.