- Price of the AUD/USD is contending about the minor channel pullback shown as the blue trend line inside the bullish channel. This will be the first opportunity of a pullback for the AUD. Significant excess of this will mean that the AUD has lost its secondary bullish momentum.
- The second pullback opportunity will be about its previous channel low of <>0.7927ish. Significant excess of this will mean that the AUD has lost its primary bullish momentum.
Until any of the above happens, the price of the AUD/USD remains bullish and an AUD overbought scenario has yet to occur. Without this scenario, the AUD can continue towards the main resistance of <>0.8867ish. This challenge of the main resistance will materialize by having the price being able to significantly exceed the previous high of <>0.8275ish, preferably after <>0.8497ish.
In a possible overbought scenario happening now; even from the start of the current bearish re-trace of <>0.8126ish shows a non-attractive risk to profit ratio of 1: 2, looking at the current price to the stop loss and Target 2. Anything less than 1:2.8 means a no-trade. Therefore, it is hoped that the AUD will continue to rise to present a worthy AUD overbought trade.
- What is desirable now would be to have the price struggle about its previous high <>0.8275ish, showing an optimal technical entry to test the hypothesis of an overbought AUD.
Disclaimer: Trading in the FOREX market & other forms of investments involves risk. This information should not AT ALL be viewed as investment recommendations. The charts & information provided here are not meant for investment purposes & only serve as technical examples.