Hi Traders! AUDUSD technical analysis and forecast is here. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting useful tips and hacks about the MT4 platform could be found here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
On the daily chart, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 0.69926 and the second low that has formed at 0.69670 based on the MACD indicator. The price then moved higher and broke above the last high at 0.73138 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. In addition to this, based on the Stochastic Oscillator, we could see that the price has reached it’s extreme, we may consider it as another evidence of bullish pressure. Also, currently there are no signs opposing this bullish view. We may now move down to lower timeframe and look for evidences supporting this bullish view.
On the H4 chart, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently it looks like a correction is happening in the form of potential double wave down. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, we have a key support zone that has formed based on the 100%(0.71649) Fibonacci expansion level of the first wave and the 61.8%(0.71480) Fibonacci retracement level of the bullish trend pattern. The price is currently bouncing higher from this key support zone, if we get a valid breakout above the most recent downtrend line shown in the image below (marked in blue) we may then consider it as a validation for this bullish view and may expect the price to move higher further.
AUDUSD D1(Daily) Chart Analysis
AUDUSD H4(4 Hours) Chart Analysis
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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Happy Trading!
Arvinth Akash
Traders Academy Club Team
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