As highlighted in our earlier March analysis, we were observing a higher-degree wave IV correction unfolding as shown on a daily chart from March 13, with price action approaching key support zones where a potential completion of the corrective phase was expected.
Subsequent update on April 02 confirmed that outlook, as AUDUSD transitioned from corrective structure into a bullish breakout phase.
AUDUSD is now moving nicely higher, and we can clearly identify a five-wave impulsive structure developing from the 0.6833 low. This supports the view that the market is in a bullish phase that should continue after a corrective three-wave pullback.
At this stage, what we are likely seeing is the final intraday fifth wave of the current recovery. Traders should therefore be aware of the potential for a higher-degree wave two retracement once this move completes. Such a pullback would represent a normal correction within a broader bullish trend.
In that scenario, initial support is located around the former wave four area near 0.7000, which could offer an attractive zone for a new rebound and continuation higher. This structure continues to support the idea that a higher-degree wave five is underway, and that the correction from the March highs to the March lows has already completed.
The key invalidation level remains at 0.6833, and as long as price holds above it, the bullish structure stays intact with potential for further upside in the coming weeks.
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