AUDUSD Is the top in? or new highs to come??

Last week (16th May) I posted a blog that posited that a rare big picture pattern on the AUDUSD was possibly nearing completion. This was based on a highly speculative view based off a somewhat mysterious and rare pattern, called a '3 peaks and a Domed House'. The original blog can be seen on the following link, together with a spectacular example of this pattern at work on the Phili Bank Index .http://hometraderuk.blogspot.com/2011/05/aud-highly-speculative-view.html.

If I have correctly identified this pattern, and if it follows through and completes as per the ideal pattern, this would suggest that the ultimate consequences for AUDUSD (and by association all risk) would be dire, with a return quite possibly to the lows of 2008/9.

If on the other hand I am guilty of fitting the pattern onto the market (and it would not be the first time), then the above is nothing more than complete nonsense.

Returning to the pattern;  my original blog suggested that either the high was in and now lower levels lie ahead, or we still have one more high to come. Nothing has yet changed in that view, I think it remains in the balance, though my hunch slightly leans towards the high being in, however if not then possibly a high will occur at some point during June/July.

The shorter term picture on the AUDUSD shows two conflicting patterns on the chart, which highlight this dichotomy. These can be seen on the 2 charts below. The top chart is the bearish option, with a 'Head and Shoulder' type pattern. The lower chart is the bullish option, with a falling wedge pattern highlighted. I believe this time next week we will have a clearer picture.

One thing is for certain,,, over the next couple of months all will be revealed.




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