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AUD/USD Completes a Double Bottom

AUD/USD was declining at the end of September but held around 0.6950. As we begin October, price action has completed a double bottom after breaking above 0.7045. 

AUD/USD 4H Chart 10/1
(click to enlarge)

As we can see in the 4H chart, the breakout is still valid although there is a pullback. The RSI in the 4H chart is still under 60, which means the prevailing bearish momentum is still in play. Price is still under the 100- and 200-period simple moving averages, the overall trend has not shifted to bullish yet. 

Still, we can say that AUD/USD has some short-term upside risk if it can stay above 0.70. At this point, a bullish outlook should be limited to the September high around 0.7280. This is because the prevailing trend is still bearish, and this rally can simply be a bullish correction swing within a medium-term consolidation.

However, if price falls back below 0.70, then the focus might return to the downside first towards the 0.6950 area, then the 2015-lows just above 0.69.