AUDUSD: Failure To Reach .8000 On Tuesday Has Brought The Pair Lower Since and Towards a Bearish Continuation
The daily candle chart below shows the medium term price history of the Australian Dollar (AUD) versus the United States Dollar (USD). This currency pair is known as AUDUSD, and is trading near .7755 around time of publication today - and near fresh session lows this Friday.
Last time AUDUSD was reviewed in Ideas You Can Trade was earlier this year when support was barely holding above .8065 in January - and the trend looked bearish.
Since then the trend continued lower along the medium term bearish channel (point 1 on chart below in purple), and only recently recovered from its March low of .7559. While that recovery continued towards .8000 earlier this week - AUDUSD failed to reach that mark on Tuesday - and has turned lower as this week finishes.
With the very short term trend turning bearish again, there could be support just below current levels near a bullish support line intersecting under today's low (green line on chart below), otherwise the bearish channel could be regained - and the March low revisited -if support fails and the medium term trend resumes.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. Bullish Buy Entry Order: Create a "Buy Entry Stop" @ .7889 with a Limit to take profit @ .7999 and a stop-loss @ .7797 Risk/Reward Summary: Limit risk = 110 pips profit / (-92) Stop-loss risk = Gain to Loss ratio = 1.19
2. Bearish Sell Entry Order: Create a "Sell Entry Stop" @ .7738 with a Limit to take profit @ .7642 and a stop-loss @ .7833 Risk/Reward Summary: Limit risk = 96 pips profit / (-95) Stop-loss risk = Gain to Loss Ratio = 1.01
Medium Term Daily Candle Chart: