A Detailed Road Map for Buy and Sell Entries in Current Channel
AUDUSD has been moving in a wide horizontal range since 2021 autumn. The price has recently dropped from the resistance level of 0.7600 and is approaching to a support area of 0.7000. From 0.7000 level, we can observe that prices have many times bounced up by forming three strong daily bullish candles, immediately breaking and retesting the next resistance level of 0.7100 before moving up to 0.7260 area.
Therefore, once the price has reached 0.7000 area, we will carefully observe for strong daily bullish candles and then a break of 0.7100 level. After 0.7100 level is clearly broken, we will prepare our buy entries to capture the retest of 0.7100 level and set our buy target at next resistance area of 0.7260. However, a clear break of 0.7000 support level will invalidate this buy setup. Therefore, it is important to wait for a strong bullish momentum first instead of trying to catch the bottom.
From 0.7260 area, we will switch to look for sell entries because we expect another retest of 0.7000 support level before price can reverse back to a bullish trend, given that this horizontal channel still holds.
Therefore, once the price has reached 0.7000 area, we will carefully observe for strong daily bullish candles and then a break of 0.7100 level. After 0.7100 level is clearly broken, we will prepare our buy entries to capture the retest of 0.7100 level and set our buy target at next resistance area of 0.7260. However, a clear break of 0.7000 support level will invalidate this buy setup. Therefore, it is important to wait for a strong bullish momentum first instead of trying to catch the bottom.
From 0.7260 area, we will switch to look for sell entries because we expect another retest of 0.7000 support level before price can reverse back to a bullish trend, given that this horizontal channel still holds.