The AUD/USD has recently reached a bullish target after forming a price pattern at the April 19 lows. Despite a current correction, the overall uptrend suggests that the pair is likely to recover. Support from the zone around the trendline is expected to provide a foundation for a reversal higher in the future.
On May 16, the AUD/USD reached a key upside target and has since retraced. The pair remains in a short-term uptrend, with the pullback being seen as a temporary correction before resuming the uptrend. The 4-hour chart of the AUD/USD indicates that the pair may find support at the red trendline for the move up and then reverse to start moving higher again. While there are currently no signs of it resuming its uptrend, a break above the May 16 high will confirm a continuation of the uptrend.
The Measured Move pattern that formed from the April 19 lows has now been fulfilled by the AUD/USD. Measured Moves typically consist of three waves labeled A, B, and C, with wave C expected to reach the same length as A or a Fibonacci 0.681 ratio of A. Wave C has met both of these targets. However, a decisive break below the red trendline could signal a bearish move and a potential change in the short-term trend.
A decisive break is characterized by a break that is accompanied by a long red candle closing near its low or three consecutive red candles breaking through the trendline. Overall, the AUD/USD’s current correction is seen as a temporary setback in the context of the overall uptrend. Support from the trendline zone is expected to lead to a reversal and continuation of the uptrend in the future. Investors will be closely watching for a break above the May 16 high to confirm the uptrend in the coming days.
