AUD/USD Price Analysis: Bulls at the ready for a test of 0.7020

AUD/USD caught a bid on the back of US Federal Reserve Chair Jerome Powell who spoke on Tuesday and doubled down on statements last week that disinflation has started. He was however arguing that stronger data could lead to a higher terminal rate than what the market is currently pricing.

Nonetheless, the markets were released that there was nothing uber dovish in his comments following a blockbuster Nonfarm Payrolls outcome from Friday's data. Subsequently, the stock market rallied and the high beta currencies, such as the Aussie, benefitted as Powell expects declines in inflation this year. Consequently, the following analysis is based on a bullish bias with both technicals and fundamentals aligning: 

AUD/USD daily chart

The daily chart's daily M-formation leaves the scope for a move to head into the M-formaiton's neckline in a 50% mean reversion to test the 0.70s with the 61.8% ratio eyed higher up in the 0.7020s. 

AUD/USD H4 chart

The W-formation on the 4-hour chart is a meanwhile bearish pattern that leaves the dynamic support structure vulnerable to a restest. However, the day is headed for a bullish close which puts the directional bias for the day ahead to the upside following three bear closes as signified by the red arrows. 

AUD/USD H1 chart

The hourly chart shows that the price is riding the trendline support with eyes on the 0.6980s and then a test of the 0.70s for the day ahead. This thesis is founded on the basis that we are about to correct towards the daily M-formaiton's neckline as illustrated above. The price is now on the backside of the prior bearish leg and has also broken the structure of 0.6950 or thereabouts.