Monday, December 5, 2016 11:14 AM EDT
AUDUSD is trading right above a long-term trendline support that connects the lows from 2001 at 0.4850 and the lows from 2008 at 0.5980. Price is now testing this support area. If price bounces off this support area we could see a replay of the upward moves that followed those lows.
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Important long-term resistance levels are at 0.7780-0.7850. A weekly close above this resistance area will open wide the road towards the Ichimoku cloud resistance above 0.85. How long and how fast it will move we will see either 0.86 or even 0.89-0.90. Until we break 0.7780-0.7850 resistance lets zoom in and take a closer look at the shorter-term and what bulls need to overtake.
All bullish scenarios want a break above 0.77 to take place first. A possible triangle formation could bring us back up to that level.
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Or is the entire corrective pullback over?
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Getting even closer I can see an impulsive leading diagonal already formed and already showing future direction.
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This scenario gets invalidated on a break below 0.7365. The resistance that needs to be broken to strengthen this bullish setup is at 0.75. The 0.75 level is also the 38% Fibonacci retracement of the decline from 0.7780. Breaking above that level will most certainly push us towards 0.76 where the 61.8% Fibonacci is found.
So bulls need to gradually break above 0.75-0.76-0.7750-0.7880 in order for a bigger bounce towards 0.85-0.90 to be confirmed. There is a long way to the top and I will be here monitoring the bullish scenario I believe in.
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