AUD/USD Price Analysis: Consolidating after pullback from May 3 high

• AUD/USD is consolidating after retreating from its May 3 high.
• If it breaks above 0.6624, a volatile move to the upside is likely
• AUD/USD could have formed a Measured Move with a final target around 0.6690.

AUD/USD is trading at 0.6610 on Monday as it continues its sideways consolidation after pulling back from the May 3 high.

Despite swinging sideways over the past week, the pair is likely in a short-term uptrend, evidenced by the ascending sequence of highs and lows since the April 19 lows.

AUD/USD 4-hour chart

Given the old saying that “the trend is your friend”, the odds favor AUD/USD to rise.

AUD/USD has attempted to break through the 0.6624 resistance level on several occasions but has failed. However, a breakout would confirm the continuation of the uptrend towards the next target, the May 3 high at 0.6649.

Assuming AUD/USD successfully breaks above 0.6624, a very volatile bullish move will likely occur as the level has been touched on multiple occasions, which usually results in a strong move once surpassed.

The next upside target would likely be around 0.6680-90, generated by a possible Measured Movement pattern that AUD/USD has formed since the April 19 lows.

The measured movements are like large zig-zags composed of three waves, labeled A, B and C. The general expectation is that wave C will have the same length as wave A or a Fibonacci of 0.681 from A.

Wave C has already reached the 0.681 Fibonacci target at the May 3 highs, however, it could also reach the target where C=A at 0.6690.

A decisive break below the red trend line would be a bearish signal, suggesting a possible trend reversal.

A decisive breakout would be one accompanied by a long red candle that closes near its low or three red candles in a row that break below the trend line.