AUDUSD - A textbook technical bullish set up
Updated
Trade set up
After a 13.7% fall from January 2018 highs, the price has made a bottoming formation, and we are looking to add to our previous long position. Our bullish bias needs to be confirmed by a weekly close above the resistance of 0.7304 (as highlighted on the chart) where we are looking to enter a long trade. The target is 0.7450 representing the 38.2% Fibonacci of January to October move.
The 1-week AUDUSD ATM straddle implies a 76-point move (in either direction), so our target may take a while to come into play based on current vols and that gives us a medium-term timeframe.
We feel placing stops below 0.7200 provides an appealing risk-reward.
Why we like it
Several key officials in the US trade administration, including Lighthizer, Kudlow and Ross crossed the wires with constructive comments regarding future trade talks development between US and China, which suggest to us that the worst could be over. Any progress supporting global trade, in turn should support sentiment towards the AUD. The G20 meeting in Argentina, on 30th of November should provide a platform for further discussion and potential resolutions.
Stochastic momentum on weekly charts shows broad momentum is headed higher and further fuels our bullish bias.
Tactically, the risk reward is appealing and fundamentals and technical are aligning.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
After a 13.7% fall from January 2018 highs, the price has made a bottoming formation, and we are looking to add to our previous long position. Our bullish bias needs to be confirmed by a weekly close above the resistance of 0.7304 (as highlighted on the chart) where we are looking to enter a long trade. The target is 0.7450 representing the 38.2% Fibonacci of January to October move.
The 1-week AUDUSD ATM straddle implies a 76-point move (in either direction), so our target may take a while to come into play based on current vols and that gives us a medium-term timeframe.
We feel placing stops below 0.7200 provides an appealing risk-reward.
Why we like it
Several key officials in the US trade administration, including Lighthizer, Kudlow and Ross crossed the wires with constructive comments regarding future trade talks development between US and China, which suggest to us that the worst could be over. Any progress supporting global trade, in turn should support sentiment towards the AUD. The G20 meeting in Argentina, on 30th of November should provide a platform for further discussion and potential resolutions.
Stochastic momentum on weekly charts shows broad momentum is headed higher and further fuels our bullish bias.
Tactically, the risk reward is appealing and fundamentals and technical are aligning.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Trade closed manually
Trade closed manually 20 points ahead of our SL.
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