The AUDUSD has been a seller’s market as this pair tumbled down in price for quite a few months. This week however, some good news from the Australian economy seen the AUDUSD surge upwards and start to recover from recently losses. The bullish power candle that was produced as a result of the good news seen price push through a key containment level which has been holding price down.
Now the market has closed aggressively higher, the chart dynamics are all pointing to the high side and our bias in the meantime is bullish. At the close of last week an indecision candle was printed, suggesting the recent upward movement has stalled at extended prices from the mean. This is common, as price can’t generally maintain itself at these extended prices for long.
We are anticipating a mean reversion move, which at that point we will be waiting for a bullish price action signal to form a the market hot spot, where an important support level and the mean value coexist together to produce that ‘hot buying zone’.