AUDUSD Analysis – Testing the neckline

On the 18^th of September, we wrote about the AUDUSD, which was very close to the major buy signal as the pair was giving the last touch to the inverse head and shoulders pattern:

“The price is creating an inverse head and shoulders pattern (grey), which is just a first step towards the buy signal. For that, we need to see the breakout of the neckline, which in this case, is marked with a yellow colour. „

The buy signal, was created one day later, as the AUDUSD broke the neckline and made new monthly highs. AUDUSD went higher and on the 21^st of September stopped on a super important dynamic resistance – long-term down trendline. This is the place where the bearish correction has started. Not that it was unexpected. It is pretty common that the broken neckline is later tested as a support. Which is happening right now, as we speak. As long as we stay above the grey line, the buy signal is on.