The pair continues its pullback after an important breakout of a long term ascending trendline. The market is now meeting a strong resistance with the daily 20 descending moving average which reminds us that the short term trend is still bearish.
We are mitigated with the AUD/USD as 2 scenarios are possible over the middle term. A major top might be in place with a confirmed double top formation on the weekly chart. In this case, a break below parity will be required to validate a major long term reversal. On the other hand, the market has found some good support on the weekly lower bollinger band which could prop the pair and allow a bullish resumption with an immediate target at 1,0650.
We will pay a close attention to the next developments as they will determine the market outlook for the rest of the year.
