Disclaimer : This is not investment advice. Past performance is not an indicator of future results.
Hi Traders! We have AUDCAD buy trade setup based on bullish flag pattern. A detailed analysis of this bullish opportunity is as follows:
Indicator used: MACD
AUDCAD Analysis – Buy Trade Setup On Daily Chart:
On the daily chart the price which was moving lower has created a bullish divergence based on the MACD indictaor, this bullish divergence is formed on both MACD Moving Average and MACD histogram indicator. Then the price moved higher breaking above the previous swing high which was formed on 21/10/2019 at 0.90203 and created the current new high at 0.91187 on 31/10/2019, thus creating higher highs, we may consider these as evidences of bullish pressure. We may now look for pullbacks to happen and then we may start looking for bullish setups with more bullish evidences on lower timeframes in order to join the bulls.
AUDCAD Analysis – Buy Trade Setup On H4 Chart:
On the H4 chart currently it looks like a pullback is happening in the form of a bullish flag pattern (you can learn about how to trade with flag pattern in my free e-book here). Measuring the whole move from October 2nd’s low at 0.8834 versus the top on 31st October at 0.9119 we can see the price is currently respecting the 23.8% Fibonacci retracement level at 0.90516. There is also bullish hidden divergence that has formed between the swing low at 0.81 and the second swing at 0.9044, we may consider this as an evidence of bullish pressure. In addition to this we also have a good support zone in the range of 0.9015 – 0.9030 and the price is holding above this zone.
If the price moves higher and breaks above the top of the bullish flag pattern we may consider it as another evidence of bullish pressure, we may then start looking for buys with more bullish evidences.
The combination of the daily bullish divergence followed by higher highs and the breakout of the H4 bullish flag pattern could provide us a good buy trade setup, we may then look for more bullish evidences in order to start looking for the buys.
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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