In my previous contribution ‘AUDUSD in 4 week range; perched at important level‘ I highlighted that the 4-week range following a 7-week down channel could be a consolidation for short term swing bears. For a short to work however, it is important to take out the 2010 high at around 1.0230 because this level could be a rallying point for long term bulls looking for AUDUSD to continue a 3-year rally that started in 2009.
AUDUSD breaks important technical level but retains big picture uptrend
With 20-20 hindsight we are certain that this range is a continuation pattern. Also it is high probability that the 2010 high support has been broken, that last night’s up move is probably retracement to establish previous support as resistance. Any swing trade from this point should focus on continuation of downtrend especially last week’s move gave us a huge expansion to the downside.
Apply caution if AUDUSD retreats back above support