AUDUSD: Bullish Momentum Testing Resistance Again As .9100 Breached Once More
The daily candle chart below shows price history of the Australian Dollar (AUD) versus the United States Dollar (USD). This pair is known as the AUDUSD. Around time of publication todat the pair is trading near .9123, and just off highs of .9129 after pushing above .9100 for the third time in the last 6 trading sessions.
The target of .9100 that was discussed in the last post about the AUDUSD continues to exhibit resistance, however, after having been breached again today - if the pair can hold above .9100 - then a higher-high should follow.
If .9100 fails to allow the bullish momentum of recent weeks to continue then a reversal may push AUDUSD back towards .8950 over the next few days.
Considering that a bearish resistance line that represents the upper line of a medium term bearish channel (point 1 in magenta color on chart below) has been breached today (also for the 3rd time in the last 6 sessions), a true breakout could mark the continuation of more bullish momentum, whereas a false breakout of this line would also signal a reversal just as the failure to hold .9100 would.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. Bullish Buy Entry Order
Create a "Buy Entry Stop" @.9156 with a Limit to take profit @.9198 and a stop-loss @.9115 Risk/Reward Summary: Limit risk = +42 pips profit / (-41) Stop-loss risk = Gain to Loss ratio = 1.02
2. Bearish Sell Entry Order
Create a "Sell Entry Stop" @ .9179 with a Limit to take profit @ .9099 and a stop-loss @ .9229 Risk/Reward Summary: Limit risk = +80 pips profit / (-50) Stop-loss risk = Gain to Loss Ratio = 1.60
Medium Term Chart with Daily Candles: