AUD/USD: Trend Up?
The action this year has almost dispelled the idea that the market may go lower - more on that one idea later. Having broken up during this past year through the 2013 - 2016 Downtrend (since removed above) the market has seemingly consolidated over the recent 50% Fib at 0.7473 and also formed this rather nice Bullish Channel you can see on the Monthly Chart above. This has seen a recent Key Reversal Down after testing over the 21s t Century 50% Fib at 0.7921 but was followed by a KR Up last month counteracting the move lower. The key levels at the moment are therefore the Fibs at 0.7921 and 0.7473 plus the two Channel Lines (currently 0.8205 and 0.7483). So what is likely to happen? Well, more of the same!
A likely continuation within the recent mildly Bullish Channel but with some interesting new developments. The first possible development will be whether we have two or more consecutive closes over the 21s t Century Fib at 0.7921. This is fairly immediate and may happen within the next three or so months. The next is the rapidly approaching 5 Year MA (currently 0.8225) which may well put a lid on any nascent Bullish development. These two are definitely ones to watch as well as the action within the Bullish Channel. Then there is more on the previously mentioned Bearish 'idea'.
The chance that the whole late 2015 -to-date action is a type of Bearish Halfway Hesitation or possible Bear Flag. I don't have any evidence for this as it is too early to say as yet but if we have over some period ahead, say two or three months move down attempting through the Lower Channel Line down to the 2016 low at 0.6821 then that 'idea' may well be on the cards...in which case the low back in 2008 just under 0.6000 would be in play as a starter. Given recent action and our being above most of the congested MAs, I will move the bullet point above into mildly Bullish.
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