AUD/USD was pulling back but it found support and rallied back up to within a few pips of the May 16 high at 0.6714.
AUD/USD has continued trending higher and almost retested the highs of May. A clear break above 0.6714 would confirm a continuation of the short-term uptrend. Only a break below the red trendline would bring into question the dominant uptrend. The Aussie is in a short-term uptrend indicated by the rising peaks and troughs on the four-hour chart since the April 19 lows. Given the old saying that “the trend is your friend” the odds favor an extension of the uptrend.
Measured moves are zig-zag like patterns composed of three waves, usually labeled A, B and C. The general expectation is that wave C will reach either the same length as A which it succeeded in doing when it peaked at 0.6714. The Relative Strength Index is much lower at the May 20 high compared to the May 16 high. The difference is a soft divergence but because price has not made a higher high on May 20 yet, it cannot be counted as pure divergence.
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