#AUDUSD is on our watchlist this week for long opportunities.
But the market has recently formed new highs on the 4hr timeframe.
Is it time to trade the dip?
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Today, we’re going to be looking at AUD/USD and its potential long opportunities.
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In yesterday’s Forex Market Outlook, we highlighted AUD/USD making higher highs and breaking out.
We suggested that the price could pull back to 0.7535 for a long opportunity, which could still happen.
AUD/USD is on our watchlist for long opportunities this week as the USD continues to weaken. In the Forex Market Outlook, the price retraced back to the daily consolidation zone for a long opportunity. However, the market recently made new highs on the four-hour timeframe.
The daily timeframe is giving us a bullish candlestick, which could go either way. Some buyers and sellers came in today.
The four-hour trend is up, and we’re making higher highs and higher lows.
If we were looking for a pullback, we would want to see the market making lower lows and lower highs at 0.76160 for a long opportunity. However, we have an uptrend instead.
The most-traded level within the consolidation area is 0.7745. I anticipate a small opportunity for a long off of the 0.7748 level, with an opportunity to trade the next resistance around 0.7795.
The four-hour is making higher highs and higher lows suggesting that the trend is bullish. Looking at the volumes within the recent retracement phase, the most traded level was 0.7745. We could see short-term buyers re-enter the market from there and drive prices higher in line with the trend.
So, if the price comes back down towards a high volume level, then we could look for a day trading opportunity to trade it back up into the previous resistance points.
Alternatively, we could look at a lower timeframe if the price goes down to 0.77447 and forms a double bottom pattern or a change in cycle pattern. We could look for long opportunities as well.
Looking deeper into the one-hour timeframe, we could look for an alternative entry. If the price trends from the 0.7745 level, then we should see a rejection and we could look for a double bottom pattern. This would also highlight the potential for the trend to continue.
So, there are two different options for AUD/USD. I like the opportunity of buying the pullback into a key resistance level.
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