*Technical analysis and an intraday trading opportunity on the AUDUSD FX currency pair*
In this blog post, I am going to talk you through my multi timeframe technical analysis of the AUDUSD FX currency market. This is the Australian Dollar traded against the US dollar. I will show you why I am looking to trade this currency pair right now and where I think it might go over the next few days and weeks.
I have posted this analysis so you can track my open trading position live on the TradingView platform. Click on the link below to see it.
Let’s get right in to it and look at the weekly timeframe chart.
As you can see, the weekly chart makes the AUDUSD look heavily over sold. Price has been selling off since the beginning of 2018 when it reached highs of 0.81000. As it stands, the selling trend looks to be flattening out at these low levels and I can see that a clear support zone has formed at 0.67000.
Even a small pullback on the weekly timeframe chart could produce a very good return if one is able to enter a position on the lower timeframe and manage risk properly.
Looking at the daily timeframe chart, I believe the trend is changing and a bullish trend is coming through. By doing simple high/low analysis, I can see that price is now continuing to make new higher highs and higher lows on this timeframe. Each time breaking resistance levels.
I am now looking to buy the dips and ride the prevailing trend up to new daily higher highs and beyond. As I mentioned earlier in this blog post, the key to benefiting from even just small pullbacks on the higher weekly timeframe, is to enter on the lower timeframes with accurate trade entries and reduce your risk. Therefore improving your returns through increased reward:risk.
Remember, reward:risk ratio is a 2 sided calculation. You can improve it by trying to take more profit and hold trades longer or by reducing your risk and improving your entry accuracy.
The 4hr timeframe chart is similar to the daily chart. Price is making bullish waves and has now made higher lows so I can use the trendline tool, fibonacci retracement levels and basic support/resistance techniques to find a good reward:risk entry.
I am looking to go long at the current price level of 0.68500. In this zone we have the previous intraday resistance (now support zone) shown on the chart by the coloured box. We also have the bullish trendline sat just below and the 0.618 fibonacci retracement level.
A stop loss placed 25-30 pips below current market price keeps it out of the way of any potential wick rejections and the Fibonacci tool allows me to use the -0.27 extension as a target for new higher highs to be made.
Long term profit targets:
Depending on what price does over the next few days and weeks, it might be possible to continue to ride the current daily bullish trend up to higher highs at 0.70 or further.
As I mentioned, the weekly timeframe chart does look very oversold so there is a lot of room for movement to the upside. The weekly 0.382 fib retracement level resides just above 0.72200 and if price was to make its way up to there then this relatively quick intraday with a potential return of 4.3R could soon change to a big swing trade.
A profit target of 0.72200 would produce a gross return of over 12R (before fees).
A profit target of 0.74000 (daily 0.50 retracement level) would increase potential return to over 18R.
All my technical analysis is done using the TradingView platform. You can get access via the link below.
My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.
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DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.