AUD/USD Price Analysis: Teasing rising wedge breakdown, focus on daily close

• AUD/USD remains vulnerable as risk-off remains at full steam.
• Escalating fears over the Omicron covid variant contagion hits the aussie.
• The pair is charting a rising wedge breakdown on the daily sticks.

AUD/USD is pressuring lows below 0.7100, breaking the Asian consolidative mode to the downside, as sellers keep complete control amid a risk-off market profile.

Despite the Australian Prime Minister Scott Morrison dismissing talks of lockdowns over the rapid spread of the Omicron covid variant, the aussie remains undermined, as the virus concerns across the Pacific continue to haunt the market.

Adding to the investors’ woes, US Senator Joe Manchin withdrew support for $1.75 trillion fiscal spending, which sent the stocks tumbling alongside the other high-beta assets such as the aussie.

Looking at AUD/USD’s daily chart, the pair is extending Friday’s steep losses after closing the previous week below the critical bearish 21-Daily Moving Average (DMA), now at 0.7137.

The 14-Day Relative Strength Index (RSI) is pointing south, well below the midline, suggesting that there is more room to decline for the major.

The next relevant support is seen at the 0.7050 psychological level, below which the December 6 lows of 0.7036 could get challenged.

AUD/USD: Daily chart

On the flip side, any recovery will need validation on a daily closing above the strong barrier, pegged around 0.7135, which is the confluence of the 21-DMA and the rising trendline resistance. Friday’s high at 0.7187 will then test the bullish commitments.

It’s worth drawing attention that the pair is teasing a rising wedge breakdown, with a daily closing below the abovementioned rising trendline resistance eyed to confirm the bearish continuation pattern.

AUD/USD: Additional levels to consider