Good morning everyone! We hope you have a beautiful trading day today. We want to show you our analysis on the AUD / USD pair, as the upside potential of this pair is exciting, and we would like you to take advantage of it.
What do we mean by upside potential?
🔸Well, as we can see, the price was in a strong downtrend for many years, which, finally, this year we could see a reversal of it.
🔸This year, the price had an increase of approximately 35%.
🔸This abrupt rise generated a break in the Descending Trendline and the most imminent Resistance Zone.
Not only that, but it also made a clear corrective move against the support zone (previous resistance), which we will now show in a lower timeframe.
How far should we wait for this rise?
🔸Although we can consider that this may be a new long-term uptrend, we do not know exactly. Therefore, we will focus on analyzing the short-term targets and adapting the analysis based on the price's behavior.
🔸This analysis gives us that the price has a short-term potential of 16% to rise towards the next resistance zone.
How could you have taken a swing position from this move?
🔸As we explained before, the price after the break of the trend line generated a corrective structure. What we do in this situation is to draw a trend line of this correction, and once it breaks to the upside, wait for the local lowering maximum to be broken (it can be considered as a resistance), and enter the market in that area. The stop loss must be placed behind the structure and the take profit in the next Resistance zone. This trade gives us a Risk-Benefit Ratio of 3 to 1.
What do we mean by upside potential?
🔸Well, as we can see, the price was in a strong downtrend for many years, which, finally, this year we could see a reversal of it.
🔸This year, the price had an increase of approximately 35%.
🔸This abrupt rise generated a break in the Descending Trendline and the most imminent Resistance Zone.
Not only that, but it also made a clear corrective move against the support zone (previous resistance), which we will now show in a lower timeframe.
How far should we wait for this rise?
🔸Although we can consider that this may be a new long-term uptrend, we do not know exactly. Therefore, we will focus on analyzing the short-term targets and adapting the analysis based on the price's behavior.
🔸This analysis gives us that the price has a short-term potential of 16% to rise towards the next resistance zone.
How could you have taken a swing position from this move?
🔸As we explained before, the price after the break of the trend line generated a corrective structure. What we do in this situation is to draw a trend line of this correction, and once it breaks to the upside, wait for the local lowering maximum to be broken (it can be considered as a resistance), and enter the market in that area. The stop loss must be placed behind the structure and the take profit in the next Resistance zone. This trade gives us a Risk-Benefit Ratio of 3 to 1.