• AUD/USD is correcting within its short-term uptrend. 
• The pair broke below a key trendline but has recovered over recent periods.
   

AUD/USD corrects back after becoming overbought. 

The pair pulls back below the trendline for its short-term uptrend during August – a bearish sign – however, it has also tracked higher over recent periods after posting a swing low at 0.6697 on August 22.

AUD/USD 4-hour Chart

AUD/USD is still probably in a short-term uptrend which given “the trend is your friend” favors more upside. The pair might continue up to 0.6799, the July 11 high. A break back above the August high of 0.6761 would help confirm further upside. 

A break below the 0.6697 (swing low and low of August 22), however, would indicate the correction had still further to fall, perhaps to a downside target at either the 50-period Simple Moving Average (SMA) at 0.6683 or the 200 SMA at 0.6636.