AUD/USD Possible Setups
Updated
Just wanted to provide my analysis and thoughts of AUD/USD as it currently stands.
Price has been making a move to the upside in a bullish channel, since around mid to late March. Over the last two days, it appears to have found some resistance around the 0.64400 mark and looks now to be moving downwards to retest the upwards channel support. From my standpoint, there are bullish and bearish possibilities here:
Scenario 1: Bullish
Price bounces off the support. For me, price respecting support on the 4hr chart would give the go ahead signal to place a long trade and aim for the 0.64400 supply zone. This would be my first target. I could then aim for a bullish continuation to the 0.66700 zone or a pull back to the channel support.
Scenario 2: Bearish
Price breaks below the support. For me, rejection on the 4hr chart would imply that this support has truly been broken. I would then place a sell trade to the 0.62300 mark. Again, this would be my first target. I could then aim for a bearish continuation to the 0.60000 zone or a bounce back to the upside.
As ever, this is just my ideas and not a set guideline. Use proper risk management in ALL trades.
Price has been making a move to the upside in a bullish channel, since around mid to late March. Over the last two days, it appears to have found some resistance around the 0.64400 mark and looks now to be moving downwards to retest the upwards channel support. From my standpoint, there are bullish and bearish possibilities here:
Scenario 1: Bullish
Price bounces off the support. For me, price respecting support on the 4hr chart would give the go ahead signal to place a long trade and aim for the 0.64400 supply zone. This would be my first target. I could then aim for a bullish continuation to the 0.66700 zone or a pull back to the channel support.
Scenario 2: Bearish
Price breaks below the support. For me, rejection on the 4hr chart would imply that this support has truly been broken. I would then place a sell trade to the 0.62300 mark. Again, this would be my first target. I could then aim for a bearish continuation to the 0.60000 zone or a bounce back to the upside.
As ever, this is just my ideas and not a set guideline. Use proper risk management in ALL trades.
Trade active
UPDATE: TRADE ENTEREDAs I mention above, we saw price nicely pull back to the bullish channel support. This area also intersects the 200EMA. A bounce to the upside was seen, and price is now cooling off a little. I'm then expecting another bullish move to the 0.64200 - 0.64400 level. My trade is as follows:
Buy @ 0.68835
TP @ 0.64210
SL @ 0.62565
I've gone for a lot size which risks just 1% of my account, with the trade having a total risk-to-reward ratio of 2. If SL is hit, we will be nearing a historic demand zone and thus can reassess there.
As always, this is just my ideas. Use proper risk management in ALL trades.
Note
Sorry, should mention that the bounce off the 200EMA is seen on the 4hr chart.Trade active
Just an update on the current buy I have. I will be holding this trade over the weekend. We are halfway up to a key resistance level in 0.64210 so it is worth letting this one play out.
It's quite possible that price may pull back a little further. Per my latest idea published, it could well pull back to the 0.63200 level which is roughly where the support zone and bullish trend line meet. This is likely to be where the 200EMA is at that time too. Hence, it is possible that we will see another bounce and a continuation of the upside move. Overall then, I'm of the opinion that the bulls will continue to prevail with this pair.
I've now moved my SL to 0.62390, which now creates a risk-to-reward ratio of 4 for this trade. This is to adjust for the risk of leaving it open over the weekend. However, the new SL is just below the 200EMA on the 1hr chart, so we would need to see some serious downside pressure to come close to hitting it. As I already mentioned, I believe the market for AUD/USD remains bullish.
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