Yesterday’s US Dollar appreciation triggered a bullish rally on AUD/USD which skewed almost whole downside move from February. If You are monitoring this pair, you might have spotted a corrective move which looks similar to flag formation. But is there a flag on AUD/USD?
We can’t be one hundred percent sure until this formation will cause a decent move up. But I don’t think it’s going to happen.
We’re still under this year high which is 0.7740 top from February. This is the closest important resistance level on the chart. Looking at daily AUD/USD chart we can notice that the pair has some trouble continuing its path to the north.
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Bull are apparently exhausted even though first two weeks of March were fulfilled with decreases on AUD/USD. Also, 0.7740 area is a key resistance zone on the chart. Connecting few main tops of AUD/USD we can easily draw a resistance line too:
Looking closer, there is evident corrective move going on AUD/USD right now. We might connect its tops and lows too, and get such image:
As You can see, there are plenty of quite big, bearish candles in this channel. But opening shorts right here might not be a good idea. Currently we’re in support zone, based on two moving averages and last lows which might be a base for bulls for further gains. But upward move is rather limited, then selling AUD/USD from 0,7700/10 might be a better idea.