Double Bottom in AUDUSD, Expected Rally Towards 0.78Trend Analysis
The main view of this trade idea is on the 2-Hour Chart. The FX Cross AUDUSD formed a double bottom or W pattern around the 0.71 and 0.718 support areas. The resistance for this pattern is observed around the 0.7475 price level where AUDUSD recently broke above and held. Expectations are for the rally to continue, which will take AUDUSD towards 0.78. This view will be negated if AUDUSD declines below 0.7475.
On the Daily Chart AUDUSD is trending higher with initial levels of resistance seen around the 0.765 price level. Once the FX Cross breaks above initial resistance, it can test the 0.78 price level. A negation of this longer termed view will occur if AUDUSD declines below 0.736.
Technical Indicators
AUDUSD is trading above its long term MA. The Awesome Oscillator is above 0 and green. The Supertrend Indicator is also in a bullish mode with support around the 0.746 price level. These tell a bullish story for AUDUSD.
Recommendation
The recommendation will be to go long at market, with a stop loss at 0.745 and a target of 0.78. This produces a risk/reward ratio of 4.35.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes. At the time of publishing, I have a position in AUDUSD.
