The AUD/USD has been holding above 0.76 for the most part in March, though it did make a low on the year at 0.7560 as we can see in the daily chart. AUD/USD Daily Chart 3/27(click to enlarge) Price action has been choppy since February and some might see a possible price bottom forming. Let’s examine the technical arguments for both the price bottom and the bearish continuation scenario. 1) Price bottom:– Price has broken above a falling trendline coming down from around 0.94, a high in September 2014.– Price is now cracking the February high of 0.7913. Just the fact that price was able to rebound to the previous month’s high is a sign that the market is in consolidation, which opens the door for further bullish correction. 2) Consolidation:– While the reversal scenario can be valid, the prevailing downtrend favors the bearish scenario.– In fact, take a look at the consolidation in September through October and then the consolidation from mid-December through mid-January. The commonality is the false bullish breakouts, which were followed by pretty convincing bearish continuation attempts. So, with both consideration of the price bottom and respect of the prevailing trend, we might expect some short-term attempt to test 0.80 before a bearish attempt back towards the 0.76 area. AUD/USD 4H Chart 3/27(click to enlarge) Bearish Continuation Scenario: We can also anticipate a bearish continuation attempt in the 4H chart. So far, price action is bullish in the 4H chart with price holding above the cluster of 200-, 100-, and 50-period SMAs. The RSI has also tagged 70 and held above 40. Now, if price falls below 0.7725 and, which is a previous resistance pivot and the bottom of the moving average cluster, we will likely see pressure back to the 0.7560-0.76 area, especially if the 4H RSI also falls below 40 and even better, tags 30. Bullish Correction Scenario: We have focused on mainly the bearish outlook because it is the favored scenario. However, if price holds above 0.7725 and continues to climb, look for a test of 0.80. Above that, there would be further bullish correction towards a common high from a previous consolidation, around 0.82.