AUDUSD: Support Target Pauses Downtrend
The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the United States Dollar (USD), known as AUDUSD, and trading near .8727 around time of publication today.
Last time AUDUSD was reviewed in Ideas You Can Trade the support target near the prior year-to-date (YTD) low of .8658 was within close reach. Since then that target was reached and support has been established near a low of .8650 (actual low reached near .8641) which appears to have paused the speed of the bearish momentum.
If support holds around current levels a genuine reversal should follow, whereas if this support line near .8650 fails the bearish trend should resume. Additional Weekly and Monthly Candle Charts are included below for comparison of the longer-term trends that may still be affecting price direction.
The US Dollar has encountered both support and resistance across a number of major pairs (including against the JPY, GBP, EUR, and CHF), and has made a slight pullback across the board, indicating that it will either resume its strengthening or retrace back to weaker levels. Accordingly, AUDUSD should be a close pair to watch from among the major currency pairs as the USD decides which way to go from here.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. Bullish Buy Entry Order: Create a "Buy Entry Stop" @.8753 with a Limit to take profit @.8807 and a stop-loss @ .8704 Risk/Reward Summary: Limit risk = +54 pips profit / (-49 ) Stop-loss risk = Gain to Loss ratio = 1.10
2. Bearish Sell Entry Order: Create a "Sell Entry Stop" @ .8638 with a Limit to take profit @ . 8603 and a stop-loss @ .8671 Risk/Reward Summary: Limit risk = +35 pips profit / (-33 ) Stop-loss risk = Gain to Loss Ratio = 1.06
Medium Term Daily Candle Chart:
Long Term Weekly Candle Chart:
Longer Term Monthly Candle Chart: