AUD/USD: Reversal Pattern Is Pointing Towards 1.0375

A sharp impulsive reversal higher in this week suggests that AUD/USD found a temporary low and completed an ending diagonal in wave 5 with a throw-over formation.

A throw-over occurs when volume is high in the fifth wave that approaches the lower trendline of the pattern, and extends slightly beneath it before a reversal occurs.

As such, the wave count is now pointing higher for a minimum three waves retracement back to former black wave four levels; 1.0375.

The pair also tested and reversed lower from blue wave (iv) resistance yesterday and that caused a current a pull-back in wave B that will ideally look for a support around 1.0200 area.

Expect a wave C rise from those levels, while pair trades above 1.0115 invalidation level.

Sentiment table

Current Trend/Sentiment

Directional Bias

Strategy

Up

  03/06 We favour longs as long as pair trades above 1.0115 low.

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