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Forex: Ideas You Can Trade - AUDUSD Nearing Downside Target of .8658

Posted by Steven Hatzakis on Sep 30, 2014 3:13:00 AM

AUDUSD: Bearish Momentum Close to YTD Low Where Support May Be Tested

The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the United States Dollar (USD). This currency pair is known as AUDUSD, and is trading near .8746 around time of publication today.

Last time AUDUSD was reviewed in September in the Ideas You Can Trade series, a sharp correction had signaled change, and the pair has since traded lower and is nearing a support target near the year-to-date (YTD) low of .8658. 

With this target still within close range, the bearish momentum might not be over, and if this line is reached - where considerable support may exist - we could see a strong enough bounce to reverse the downtrend.

If support is reached on the YTD low and fails to hold - then the bearish momentum should continue, whereas if support is found even near current prices an early recovery could be underway. However considering the slope of the trend line of the last few weeks, it looks more likely for the bearish pressure to push prices at least towards that YTD low before a next move is decided for the AUDUSD.

 

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

1. Bullish Buy Entry Order: Create a "Buy Entry Stop" @.8894 with a Limit to take profit @.8940 and a stop-loss @ .8857 Risk/Reward Summary: Limit risk = +46 pips profit / (-37) Stop-loss risk = Gain to Loss ratio = 1.24

2. Bearish Sell Entry Order: Create a "Sell Entry Stop" @ .8699 with a Limit to take profit @ . 8659 and a stop-loss @ .8739 Risk/Reward Summary: Limit risk = +40 pips profit / (-40) Stop-loss risk = Gain to Loss Ratio = 1.00

Medium Term Daily Candle Chart: 

AUDUSDDaily sept 30 2014 note

 

Medium Term Daily Candle Chart zoomed out: 

AUDUSDDaily sept 30 2014 note zoomed out

 

Topics: AUDUSD, forex trading, technical analysis, USD, aud, Aussie Dollar, Australian Dollar

 

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