AUD/USD Price Analysis: Possible formation of a bullish pennant continuation pattern

• The AUD/USD pair could be forming a bullish continuation pattern on the four-hour chart.
• A break above the high of 0.6714 could confirm the continuation of the short-term uptrend.
• A break below the red trend line would call into question the dominant uptrend.

AUD/USD is rising within a channel in a short-term uptrend that tends to extend, given the old adage that “the trend is your friend.”

The Australian Dollar could be forming a bullish continuation pattern on the four-hour chart.

A break above the top of the consolidation representing the “pennant square” (shaded rectangle in the lower chart) and the May 16 highs of 0.6714 would confirm the activation of the bullish pennant and a continuation of the uptrend in the short term to an initial target at 0.6728. Further uptrend could even take the price up to 0.6788.

AUD/USD 4-hour chart

The Australian Dollar is in a short-term uptrend indicated by rising highs and lows on the 4-hour chart since the April 19 lows.

A decisive break below the red trend line would be a bearish signal that could denote a short-term trend change.

Decisive would be characterized as a breakout that was accompanied by a long red candle that closed near its low or three red candles in a row that crossed the trend line.