AUD/USD is currently showing potential signs of forming a bullish continuation pattern on the four-hour chart. This indicates that there may be a continuation of the short-term uptrend if the price breaks above the 0.6714 high. However, if the price breaks below the red trendline, it could call into question the dominant uptrend.
The Australian dollar is rising in a channel, signaling a short-term uptrend that is likely to extend further. The trend is considered a guiding principle in trading, suggesting that the current upward movement may continue. The potential formation of a Bull Flag continuation pattern on the four-hour chart further supports the notion of a continuation of the short-term uptrend.
If the price of AUD/USD breaks above the top of the consolidation, representing the “flag square,” along with the 0.6714 May 16 highs, it would confirm the activation of the Bull Flag pattern. This would likely lead to a further uptrend with an initial target at 0.6728, and potentially even rise to 0.6788. The chart shows a clear upward trajectory for AUD/USD, indicating bullish momentum in the market.
In the short-term, AUD/USD has been displaying a series of rising peaks and troughs since the April 19 lows, indicating an uptrend. However, a decisive break below the red trendline could signal a bearish shift in momentum. This break would need to be significant, with characteristics such as a long red candle closing near its low, or three consecutive red candles breaking through the trendline.
In conclusion, AUD/USD is currently showing signs of a potential bullish continuation pattern, with the short-term uptrend likely to extend further. A break above the 0.6714 high would confirm the continuation of the uptrend, while a break below the red trendline could signal a shift in momentum. Traders should closely monitor these key levels to assess the next direction for AUD/USD.
