Published On: Fri, Mar 17th, 2017

All timeframes highlight bullish bias in AUDUSD

InstaForex

Background


We are going to look at AUDUSD today. Buying a dip is favourable with scope for a mild correction in the USD.

Monthly (one): We are in an expanding wedge formation with the baseline (trend of higher lows) holding. Although this formation has an eventual bias to break lower, there is ample scope for a move to the upside first. The strong bullish engulfing candle form January gives a positive bias.

Source: Saxo Bank

Monthly (two): A bit of forward thinking… A strong move higher from current levels and we could form a bearish head-and-shoulders with a move towards 0.9454-0.9849, so plenty of upside scope.  

Source: Saxo Bank

Weekly: There are also two ways to look at this timeframe (both bullish): a reverse head-and-shoulders or an ascending triangle formation. Measured move target is 0.8855.

Source: Saxo Bank

Daily: Yet another reverse head-and-shoulders. The prime long entry is close to the Marabuzo (0.7635) previous swing high (0.7631) and bespoke support (0.7628).

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Source: Saxo Bank

Management and risk description


A move through 0.7738 and the stop can be placed at entry.

Parameters

Entry: buying in the 0.7635-28 zone.

Stop: 0.7590.

Target: 0.8465 and 0.8850.

Time horizon: medium term.

— Edited by Michael McKenna

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