AUDUSD displays strength amid gains

THE AUDUSD has finally started in green in October after a gruelling bearish downtrend that lasted for 5 months. It has since continued to extend its third consecutive week of gains. The pair displays strength when it attempts to break above key resistance levels of a few chart patterns on the weekly timeframe. The technical setup of the AUDUSD is currently bullish and we foresee that it will continue to advance based on the following observations.

Looking at the weekly chart of AUDUSD, 3 bullish reversal chart patterns can be identified in 2021.

Firstly, the AUDUSD consolidated in a falling wedge from February till Oct 11 this year, where a breakout of the formation could be seen. Secondly, the pair had also broken out of the neckline (0.7479) of a double bottom formation, which hints at an upside equivalent to the depth of the double bottom. Thirdly, the double bottom formation which spanned from July 12 this year may also be interpreted as an ascending triangle. A breakout from the horizontal resistance line of the triangle pattern tends to signal the beginning of an uptrend. A confluence of imminent bullish breakouts from the above chart patterns makes a convincing case that the AUDUSD is poised for further gains.