Look at the attached image where price is confined in a channel of a weekly chart. We can see the presence of the weekly 50 EMA which often acts as dynamic support and resistance in most cases. The price did breakout from the range but however it failed to close above weekly 50 EMA! The price is now headed back to test the range's resistance and most of the traders would think its a good opportunity to enter at this stage.
Well fundamentally its a good setup to enter as the trade deal is almost done which usually helps the AUD in this case however looking at the technical perspective we have to be concerned that the price has NOT yet closed above the weekly 50 EMA! so what can we do to trade this pair cautiously?
Well logically we should wait for the weekly candle to close above the weekly 50 EMA and go LONG from there with the upper end of the weekly channel as our primary target. As for now i want to see where the weekly candle closes and how does the price behave in the coming weeks before i take this pair LONG.
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