The Australian Dollar has been mostly ranging across the board in relation to other major fiat currencies. But sooner or later the price will continue trending. Currently, the probability is in favor of the uptrend and we might see AUD/USD rising by another 125 pips in the following week.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
AUD/USD symbol on the MT4 platform
Type: Bullish
Key support levels: 0.6920, 0.6900
Key resistance levels: 0.7000, 0.7080
Price Action:
The overall trend of the AUD/USD remains very bullish. But during past month pair has been mostly range trading between 0.6840 support and 0.6975 resistance areas. Nevertheless, we can witness higher highs and higher lows being produced by the price, which suggests a higher probability of further growth.
Today AUD/USD rejected the long term uptrend, which could initiate new wave to the upside. And as long as price remains above today’s’ low at 0.6922 we can expect the price to test key resistance at 0.7080.
The resistance is confirmed by two Fibonacci retracement levels, applied to two corrective waves down as per the chart below. The 127.2% and 161.8% meet exactly at 0.7080, making it a potential supply zone for AUD/USD.
Potential Trade Idea:
The reasonable buying opportunity is provided while price remains near 0.6945 because this is the 1h closing price area after rejecting the uptrend trendline. Considering that the take profit could be at 0.7080, the stop loss could be placed not lower than 0.6996 in order to meet the 1:2 Risk/Reward ratio.
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