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Forex: Ideas You Can Trade - AUDUSD Hanging on Support Above .8065

Posted by Steven Hatzakis on Jan 22, 2015 5:43:00 AM

AUDUSD: .8065 Nearly Reached Again Yesterday as Pair Is Re-Testing Area For a Possible Breakout or Reversal

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 .8104 around time of publication today.

Last time AUDUSD was reviewed in Ideas You Can Trade, late last month, prices were near similar levels as the pair was approaching a downside target of .8065 - which was described as support. Since then, that support target was reached, and has been tested several times (with the latest near yesterday's session low of .8076)  after resistance under the longer term bearish line (point 5 in red on chart below) reversed the recovery last Thursday. 

As the pair is currently hanging just above support, If this area near .8650 is breached again - a bearish continuation should unfold (with support possible near .8035) and with a more bearish target near .7915 within the medium term bearish channel (point 1 in magenta color on chart below).

If a recovery follows from current support above .8650 then the resistance under the above mentioned longer term bearish line (point 5 in red) which kicked-in on January 15th will remain the next upside barrier. 

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

1. Bullish Buy Entry Order: Create a "Buy Entry Stop" @ .8142 with a Limit to take profit @ .8192 and a stop-loss @ .8099 Risk/Reward Summary: Limit risk = +50 pips profit / (-43) Stop-loss risk = Gain to Loss ratio =  1.16

2. Bearish Sell Entry Order: Create a "Sell Entry Stop" @ .8057 with a Limit to take profit @ .8019 and a stop-loss @ .8089 Risk/Reward Summary: Limit risk = +38 pips profit / (-32) Stop-loss risk = Gain to Loss Ratio = 1.18

Medium Term Daily Candle Chart:

AUDUSDDaily January 22 2015 note

 

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

 

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