Technical analysis of AUD/USD for August 1, 2017

AUD/USD has recently broken out of a multi year consolidation triangle pattern and is in a weekly bullish trend heading for 0.87. Short-term trend is bullish but over the next few weeks, we might see a deeper pull back which will be a huge buying opportunity.

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Blue lines - bullish channel

The AUD/USD is trading inside the bullish channel making higher highs and higher lows. The RSI (5) is diverging but still, the price is in a daily bullish trend. I could justify a pull back towards the lower channel boundary in order for the oscillators to relieve the overbought conditions. However, in general, I would expect a back test of the broken triangle pattern around 0.77-0.78 and then resumption of the up trend.

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Red lines - triangle pattern

Magenda lines - target of triangle breakout

The AUD/USD is in a breakout mode heading towards 0.87. The trend is bullish in the weekly chart as the price is above the Kumo (cloud) and tenkan- sen has crossed the kijun-sen above the cloud. The length of the triangle base is now the target of the expected move of the breakout.

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