AUD/USD Price Analysis: Bullish Reversal Potential

• The AUD/USD pair briefly broke out of a descending channel and rebounded.
• However, the rise was short-lived and the pair retreated inside the channel.
• If AUD/USD breaks back above the previous high from the initial breakout, it will be a bullish signal.

AUD/USD has been falling within a descending channel since the March 8 high at 0.6667.

Over the past three days the pair has risen from the bottom of the channel to the highs and on Thursday it briefly broke the upper boundary line before retreating back inside it.

US Dollar vs. Australian Dollar: 4-hour chart

However, a move above the post-breakout rally high at 0.6620 would confirm two things.

First, that the channel breakout was a valid bullish breakout, likely to extend to the upside.

Second, that the short-term trend had probably reversed from bearish to bullish.

This move would likely lead to a move higher to a conservative target at 0.6670, calculated as the 0.618 Fibonacci extension of the channel height extrapolated from the upside breakout point.

Further strength could lead to the achievement of the second target at 0.6715, which is the full height (Fib. 1.000) of the channel extrapolated above.