AUDUSD is in a tricky position

The AUDUSD is in a tricky position. It is currently positioned at 0.5 retracement of the impulse move XA marked in the chart. The pair is definitely moving towards the 0.72 mark but predicting the path it would take there is the challenge. After a month-long accumulation phase in August, when the pair was trading at its yearly lows (marked in the rectangle), it broke out into a classic uptrend until last week where some sort of a mini distribution happened. Whether the distribution phase has ended or not can only be confirmed based on the price action on Monday.

If the pair goes till the 0.618, 0.7, 0.786 retracement levels of XA, then of-course the mini distribution has ended and this looks like the likely scenario. The month-long accumulation in August looks like a long term position and accumulators are not likely to sell their positions at this point (for a mere 100 - 150 pips).

If the price takes a small dip (50 - 60 pips) on Monday till C as marked in the chart, I will be interested in opening a long position. In that case, the pattern forming will be a BAT.

If the price continues its rise, will wait till it reaches 0.618 and 0.786 just watching the price action. In this case, it is extremely likely that a retracement will happen and the structure is a Butterfly or a Gartley.

Will open short position at this point for a 100- 150 pips.

Ultimately, the price is looking to reach 0.72 and we can make the most of it by being prepared and closely watching the price action on the 4 hr chart and hourly chart, especially the session openings of London and Newyork.

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