AUD/USD: Bearish Reversal Confirmed

Grega Horvat

AUD/USD has turned up in the past few months, but most likely only temporary as the rally from the low is having an overlapping structure. We know that this is a characteristic of a contra-trend price action, so trend remains bearish for now within impulse that is in play since mid-2014. Ideally, market is now breaking lower, down into wave (5) after recent push beneath the channel line. That said, an impulsive decline could unfold towards April lows.

AUD/USD Daily Chart

On the 4h Chart AUD/USD has turned strongly to the downside, now trading well beneath the channel line so bearish reversal is considered as confirmed. That said, more weakness will likely follow in this week, but as always, we need to be aware of a corrective bounce. We are talking about pullback that can show up if price will go back above 0.7800.

AUD/USD 4 Hour Chart