The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the United States Dollar (USD), known as the AUDUSD, and trading near .9266 around time of publication today.
Last time this paid was reviewed in the Ideas You Can Trade series, earlier in July, a failure to break above .9500 made the AUDUSD look bearish including the breakdown of a long term support line.
Since then the pair has traded lower, and is within a narrowing bearish channel and still looks poised to reach .9200 over the very short term, as discussed in the last above-mentioned post.
For a bullish recovery to follow the upper line of the narrowing bearish channel would need to be surpassed, and support near .9325 - which didn't hold earlier in today's session.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. Bullish Buy Entry Order: Create a "Buy Entry Stop" @.9374 with a Limit to take profit @.9404 and a stop-loss @ .9349 Risk/Reward Summary: Limit risk = +30 pips profit / (-25) Stop-loss risk = Gain to Loss ratio = 1.20
2. Bearish Sell Entry Order: Create a "Sell Entry Stop" @ .9249 with a Limit to take profit @ .9212 and a stop-loss @ .9279 Risk/Reward Summary: Limit risk = +37 pips profit / (-30) Stop-loss risk = Gain to Loss Ratio = 1.23
Medium Term Chart with Daily Candles: