AUDUSD has been showing resilience against any subsequent bearish market sentiment. Many of us are expecting the pair to reach back to the parity, however, volume accumulation from Money Managers are being attributed in the investors' interest in the safe-heaven like high yield currency against anything EURO.
The pair is currently traded with a bullish sentiment, however, 1.0300 could be a catalyst zone for the next retracement downside. Below parity is very unlikely as the AUD safe-heaven status prevails in hyper physical demand for commodities such as Crude Oil and Gold. So, let's try to to find out what is behind the AUD strength by looking at the Forest from the Trees.
As the upside correction on Crude Oil continues, AUDUSD is following the trend, however, with lack of conviction for positive correlation. It interprets, upside correction for the pair is limited and volume accumulation is keeping it from any downside momentum. Similar but highly positive correlation is visible in AUDUSD and GOLD.
As both AUD and Gold attributes higher demand, they are more likely to be susceptible to any selling pressure. As Gold demand may rise in expectation of another QE, AUDUSD may follow the upside momentum. Any upside move could be undermined by impulsive downside rally in Euro.
Based on these analysis, there are two possible scenarios--a retracement back to the parity where the pair could rebound up to 1.0650 level in order to form a H&S pattern as shown on the Chart here; or, it may continue the downside below parity if the volume returns to Distribution phase from the market makers. This Chart also shows possible support and resistance levels within asymmetric triangle pattern.
"A forest of these trees is a spectacle too much for one man to see"--David Douglas
(Note: Correlations are based on hypothetical and observed Impulsive and Corrective wave patterns; Beta or, R-sq is not defined. For intra-day trade alerts, follow me on twitter @fiblogix)