AUD/USD: Bullish 3-Weeks Candle Pattern; Make Or Break At 0.7525
The Australian dollar enjoyed a bounce from the lows, partially thanks to Trump’s downing of the dollar. What’s next?
Here is their view, courtesy of eFXnews:
Trend: Price broke down from its broad 2016 triangle in Q4 2016 and challenged the bottom of the nine-month range and our downside target at 0.7150/00 in December. Weekly MACD broke below zero in December confirming a MT downtrend bias.
The response to nine-month lows at 0.7150/00 has been positive however, last week completing a bullish three-week candle pattern. This implies that price will correct further into the multi-month range in the weeks to come. This will not threaten the interim downtrend while price remains below the previous high at 0.7525. Important to note that AUD/USD has been in a downtrend since 2011. The 2015/16 upward correction tested this downtrend but failed to break it. The LT downtrend remains in play.
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(Click on image to enlarge)
Outlook: Price achieved our downside target at 0.7150/00 in late December. Bullish three-week candle pattern completed last week confirms the hold of nine-month lows at 0.7150/00 and implies that range lows will hold on a multi-week basis.
Upward correction is unlikely to be sustainable given the MT/LT bearish structure. Below 0.7525 the MT downtrend remains in play.
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