AUD/USD Price Analysis: Consolidating after pull back from May 3 high
|- AUD/USD is consolidating after pulling back from its May 3 peak.
- A break above 0.6624 would likely result in a volatile move higher
- AUD/USD may have formed a Measured Move with a final target at around 0.6690.
AUD/USD is trading in the 0.6610s on Monday as it continues its sideways consolidation after pulling back from its May 3 peak.
Despite oscillating sideways for the last week, the pair is probably in a short-term uptrend, evidenced by the rising sequence of peaks and troughs since the April 19 lows.
AUD/USD 4-hour Chart
Given the old saying that “the trend is your friend”, therefore, the odds favor AUD/USD going higher.
AUD/USD has attempted but failed to break above the 0.6624 resistance level on several occasions. Nevertheless, a break would provide confirmation of further upside to the next target at the 0.6649 May 3 high.
Assuming AUD/USD successfully breaks above 0.6624 it will probably result in a highly volatile move to the upside, since the level has been touched on multiple occasions which usually results in a strong move once broken.
The next target higher would probably be at around 0.6680-90, generated by a possible Measured Move pattern that AUD/USD has formed since the April 19 lows.
Measured Moves are like large zig-zags composed of three waves, labeled A, B and C. The general expectation is that wave C will be either the same length as A or a Fibonacci 0.681 of A.
Wave C has already reached the Fibonacci 0.681 target at the May 3 highs, however, it could also achieve the target where C=A at 0.6690.
A decisive break below the red trendline would be a bearish sign, suggesting a potential reversal of the trend.
A decisive break would be one accompanied by a long red candle which closes near its low or three red candles in a row that break below the trendline.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.