With the right price reaction to AUD rate decision, scheduled for this week, $AUDUSD may finally pick up some strength and breakout of its daily downtrend line.
The is the setup that may support this assumption.. but we've seen plenty of double bottoms in $AUDUSD during the last year that were violated by the weakness of the Aussie... so it is a risky trade.
Several things that may indicate that this time is different:
1. We are near a Figure level - 0.7 - Psychological level that centers the attention of buyers and sellers.
2. We've seen USD folding to CAD (in USDCAD ) and to the EUR ( EURUSD trade) last week. $DXY also shows signs- See linked ideas.
3. Price is about to close above its Fast line following last week's False Break. The Fast line is used to get preliminary signs of potential shift in trend.
Last week in the Elite Zone (my private members group) we already used 0.7 for an early entry. An hourly completion near 0.695 was our trigger (see the trade - http://goo.gl/VHNMmr)
The R/R here is about 1:3 (final target level near 0.76 and stop loss should be below 0.69.
Initial target level, in case of a breakout, will be 0.715-0.72, previous .
The final target level is set based on structure, 200 line and the 61.8 Fib level.
That's it for now.. I'll update with the results later this week.
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0.71-0.72 is now support and potential buy zone for a continuation trade