The #AUDUSD formed a bullish engulfing candle on Friday, showing a potential reversal in the downtrend. If this bullish momentum is going to continue, we should expect to see a day trading opportunity.
We’re going to look at AUD/USD and a potential day trading opportunity in this market.
Last Friday, AUD/USD had a really nice bullish engulfing candle. We spoke about it in the recent Week Ahead Analysis and now that it formed, we can start looking for long opportunities at the swing highs at 0.76.
We can look at a 50 retracement of the daily candlestick as the midpoint area, which can act as support and resistance sometimes. That area can often act as support, especially when we have quite a high-ranging candlestick, like a bullish or bearish engulfing candle.
The first point of interest is the midpoint area, around 74.88. The price previously found some support there recently. If the price goes back to the midpoint of Friday’s candlestick, we could look for changes in cycles on lower timeframes or even some four-hour price action around that area.
The AUD/USD bullish engulfing candle highlights a potential day trading opportunity. The first opportunity could form at the midpoint of the bullish engulfing candle where we saw buying momentum in the past. If the price forms a bullish price action or a change in trend on the lower timeframe, we can look for a long opportunity.
Alternatively, if the candles remain bullish, we could see a break of the Asia session highs.
In the 15-minute timeframe, we can look at where the Asia session highs and lows are, which is in the lows and all the way up the recent swing highs.
There was a rejection of the 50 retracement during the Asia session, which is also a strong level of support. There was also a nice double bottom chart pattern where the price broke to the upside. If we’re going to see the bullish momentum continue, we could look for an intraday trading opportunity. We could also expect a breakout of the Asia session highs, which sits at 75.26.
Alternatively, we can watch for the Asia session highs to break as we could expect the daily timeframe to form higher highs and lows. If the price breaks these highs, we can look for it to be retested and rejected for a long opportunity.
If we get a downtrend towards that level, we can look for reversal patterns like a double bottom pattern and an opportunity to buy the retest of the Asia session highs. This is because we’re assuming that the daily timeframe is bullish and that the daily candlesticks will continue to form higher highs and higher lows.
So, that’s the AUD/USD intraday or day trading opportunity.
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