AUD/USD Coming Into Lofty Territory, But…

For the year, the AUD/USD has had an impressive run which shows in the numbers;

-19 Bullish Daily Closes (out of 29 or 65% Bullish Closing Ratio)
-Only 2x Were a Bearish Close Followed By Another Bearish Close (1st week of the year)
-Since then, every single  Bearish Close has been followed by a Bullish Close
-Only 5 Out of Those 10 Bearish Close days took out the prior daily lows

All of these stats by themselves are impressive and communicate how consistently the bulls have been in control. From a price action perspective, it should be noted for the last month, anytime we get a daily bearish close, the next day is an up day.  Also, when we get a bearish close on a daily basis, it only has a 50% chance of taking out the prior day’s low, suggesting the selling can 1 out of every 2x be somewhat tame and not take out many bulls in the process.  Thus, all this communicates control and consistency on the part of the bulls.
One statistics we’d like to point out is on the daily charts, over the last 10yrs, the AUDUSD has at a maximum floated above the 20ema (not touched it) for 34 consecutive candles.  Currently, we are at 22, so we still have more to go before we hit our historical max.  However, we are getting into the twilight of this move before we expect a pullback to the 20ema.  So if we continue to see price float above the 20ema for another 7-10 candles, then we will expect a pullback shortly after.

And rightfully so, taking a step back on daily charts below, we can see we are coming into some lofty levels for the pair.  We have three key swing points above, such as;
1.0842 (today’s high)
1.1010 May 2nd, 2011 high
1.1082 All-Time High July 27th, last year
So we are definitely coming into thinner air for the pair.  Until we get a signal this trend is over, we will look for pullbacks to get back long on the pair, perhaps 1.0750/30 on an intraday level.  Also close to the 20ema on the 4hr time frame may offer some good with-trend plays.  As for targets, besides yesterdays high, you have the list above, but expect price action to saunter along at a casual pace.  Why?  We don’t expect too many bulls to be excited about piling on new positions, or new traders coming on board at this stage in the game, so watch for pullbacks and price action clues to get back into the trend.  Any strong reversal bars will likely trigger profit taking for all who’ve been along for the ride, which could cause a sharp and fast drop in the pair.  If we see back to back bear closes, or 1.0575 taken out, then we’d expect losses to accelerate and profit taking from a large portion of the stale longs still in play.