AUDUSD long confluence support idea (D)

FX:AUDUSD   Australian Dollar / U.S. Dollar
AUDUSD has been trading in a bullish swing cycle since 2016 scoring mostly higher highs and higher lows. After the previous pitchfork ( bearish ) formation broke to the upside mid 2017 giving way to a new pitchfork formation. The pair looked to have broken out of the bearish cycle and accelerating price to the upside. After some back-and-forward where the pair hit the upper pitchfork three times (twice in 2017 and 2018) and support (late 2017) the pair appears to be approaching confluence support after a couple of months of bearish decline. There may be an opportunity for long entries given confluence of the following:

  • Ascending support starting early 2016.
  • 38.2 fib level, which has previously taken turns acting support and resistance .
  • Pitchfork median at around 0.7680, just above confluence.
  • Price is currently consolidating at the median.

The following must occur to confirm entry:
  • Price moves around/just below the median at 0.7680.
  • Price does not break ascending support.
  • Price does not break the psychological 0.7600 level.
  • Near time price action indicates bullish sentiment.

The price action zone we're focusing on for entry is between 0.7600 to 0.7680. The following is a possible trade management strategy for a long entry:
  • Stop loss could possibly be set at the previous pitchfork's upper 1.0 median at around 0.7540.
  • Initial target can be set at the 23.6 fib level.
  • Secondary target could be set around the upper 0.5 median and the very important psychological 0.8000 price level.
  • The final target, unless price bounces off the 0.8000 price level, could be set to the upper 1.0 median at around 0.8200.

We want to see determination in the price action from the market to confirm the trade. If however the price breaks both the ascending support and the 0.7600 psychological price level, we should see accelerated moves to the downside with the first support being the area around our stop loss. Keep in mind that most of the news coming out these couple of weeks is USD focused and if the market views the reports favorably, it could be the nudge that breaks support and invalidates this trade.

In any case, good luck out there and have fun.
Trade active: Price moved around the price zone we were looking at, then the bulls came charging and made a strong move to the upside. Be vigilant of the bears attempting to reclaim lost ground.
Comment: The bulls seem to have taken control and price action yesterday showed us conviction by blowing right through possible resistance confluence:
  • Upper resistance downtrend channel (dashed red)
  • 100 EMA and 200 EMA
  • On the 4h time frame we looked to be trading constructively in a ascending Pitchfork, yesterday we blew right through the upper 1.0 median.
It looks like we're on track for our first target. Be mindful of retracements after big moves.
Comment: link didn't paste correctly after the list:

Trade closed manually: Price meandered after the first push by bulls but then broke down around initial resistance.
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