AUDUSD Price Action Analysis 27/08/14

FX:AUDUSD   Australian Dollar / U.S. Dollar
127 0 1
AUDUSD             is in a range bound trade since April 2014. The chart above shows that some of the Daily candlesticks closed above the range and suddenly came back within the range but there is no single bar that closed below the range. This indicates that the market wants to go higher but couldn't because there is not enough bulls right now. There were also two spotted large pin bars and of which just formed recently. This formation of a large pin bar recently means that the market is rejecting the lows which also indicated that the price do not want to go any lower. It is also worth mentioning that the trend before this range bound trade happened was up. Therefore, a continuation of this trend is likely to happen. We do not want to trade against the trend. And the trend we are looking for is just the recent trend or the short trend. And in this case, it is up. Of course, there are many possibilities. But we need to stick and stay with the trend. If the trend did not go our way, it means that a reversal could be forming and that means, there is a new trend that we need to follow. Just that simple.

As of now, the current price is going up, which confirmed the recent Large Pin Bar ( Bullish ). The price might go back up to the resistance again and retest it. If the resistance holds, we don't want to go short. We'd wait for the price to go back down to the support level and go long. If the price breaks out above the resistance, that would be a good opportunity to go long for the aggressive traders but for the conservative ones, a retracement of this level is needed before going long. This is to confirm if the uptrend is back or it is just a false break. Again, I'm bullish with this currency and I don't want to go short here.
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