Weekly Forex Update: AUD/USD

The uptrend on the daily time frame of the AUD/USD has corrected lower. Selling pressure built at the 0.9200 level sending the pair lower in what could be considered part profit taking, and part over extension from a four week rally. The current market direction on the AUD/USD shows the bulls are pausing at the front of a week of potential high impact data. This will start today with the Reserve Bank of Australia Meeting Minutes' release. This important event could set the tone for the remainder of the week.

If the breakout through resistance on the 240-minute's Channel Down pattern alert is any indication of the next leg of the AUD/USD, the bulls are ready to resume the daily chart uptrend. The rally through the 0.8940 (E) level has triggered an Autochartist Reversal of the Trend (ART) entry long. The trend on the 240-minute chart is down and confirmed by the seven-bar Initial Trend reading. While seven bars do indicate a trend, it's not strong, and therefore a reversal higher could have the momentum needed to start shifting the negative sentiment.

The Autochartist Breakout indicator reflects the strong bullish momentum with which the pattern reversed and is excellent confirmation of the near term market sentiment. The 240-minute AUD/USD is positioned to make a rally to the Forecast resistance waiting between 0.9062 and 0.9185 (F).