The pair is probably in a short-term uptrend, however, evidenced by the rising sequence of peaks and troughs since the April 19 bottom. Given the old saying that “the trend is your friend”, this means the odds overall favor AUD/USD going higher.
However, AUD/USD needs to break decisively above the resistance at 0.6650 to continue trending higher.
A decisive break is one which is accompanied by a long green candlestick that breaks and closes near its high or three green candlesticks in a row that break above the level.
If AUD/USD can successfully break above the resistance level it will probably move up to the level of the May 8 high at 0.6667. A break above that would be highly bullish and lead to a move up to a target at around 0.6690. The latter target is generated by a possible Measured Move pattern that AUD/USD has formed since the April 19 lows.
Measured Moves are large zig-zag like patterns composed of three waves, usually labeled A, B and C. The general expectation is that wave C will be either the same length as A or a Fibonacci 0.681 ratio of A.
Wave C has already reached the Fibonacci 0.681 ratio target when it rallied up to the May 3 highs, however, it could also achieve the target where C=A at 0.6690.
On the other hand, a decisive break below the red trendline would be a bearish sign and could denote a change of the short-term trend.
