Hello traders!
On the 4h chart of AUDUSD we can see market trading in a bullish price move, commonly named an impulse. An impulse is a five-wave move, that trades in the direction of the stronger trend (in our case to the upside). That said, we know that nothing moves in straight lines, which means that after a 1-2-3-4-5 move develops, a temporary A-B-C correction follows.
On our chart we see the price now trading out of a triangle correction, which was located in wave 4), and into a wave 5), that can target 0.738 possible resistance area or higher resistance at the 0.744 level. That said, once wave 5) unfolds, and we see price in a new impulsive drop, also below the 0.726 level, that is when an A)-B)-C) correction can be underway and bulls temporarily on hold.
AUDUSD, 4h
Now let us look at USDCNH, the market, which is negatively correlated to the AUDUSD.
USDCNH completed a big A)-B)-C) correction in 2020, and started declining impulsively, down from 7.19 high. This impulsive fall suggests more upside on the AUDUSD in the long-term, however, on the near-term we still need to be aware of temporary pullbacks, as expected on AUDUSD 4h chart.
USDCNH, weekly
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