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Forex: Ideas You Can Trade - AUDCAD Breaks Above Resistance

Posted by Steven Hatzakis on Sep 3, 2013 5:58:00 PM

AUDCAD:  Bullish Momentum After Break Above Medium Term Bearish Resistance Line

The daily candle chart below shows AUDCAD breaking and closing above medium term bearish resistance (point 1 on chart) in yesterday’s trading session where it also reopened today above -confirming a breakout to the upside - with bullish momentum following pushing the pair above the 23.6% Fibonacci level (point 6) and near session highs coinciding just above a short term bullish trend line (point 5) which may provide further continuation with a target of the 38.2% Fibonacci level (also point 6) intersecting near .9750 by mid-September.

The bearish trend in AUDCAD was noted in a previous article on the pair in July 2013, where the medium term bearish resistance line (point 1) was highlighted and has since provided resistance repeatedly until its failure to resist prices in yesterday and today’s session where the pair is currently trading just above near .9538 (as of publication).

 If the current bullish support lines (point 5) fail, the medium term bearish line (point 1) may be targeted and could act as support (to support a descent) with further support below on a long term bearish support line (point 7) just below near .9200 by mid-September. A regression analysis indicator (point 8) is also included to emphasize the essence of the trend which appears to have changed.

 

 Below are examples of how to trade a bullish continuation or a bearish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .9559 with a Limit to take profit @ .9599 and a stop-loss @ .9529 Risk/Reward Summary: Limit risk = + 40 pips profit /   (-30) Stop-loss risk = Gain to Loss ratio = 1.33 

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .9439 with a Limit to take profit @ .9380 and a stop-loss @ .9468 Risk/Reward Summary:   Limit risk = +59 pips profit / (-29) Stop-loss risk = Gain to Loss Ratio = 2.03

 audcaddaily september 3 2013 note

 

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