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The Audusd pair has retained its bullish bias. It has managed to break and hold above .9200 with a solid bullish weekly close for the week ending April 9th, followed by another close above at the end of this past week, April 16th. Although it closed as a bearish candle, I believe that it can be interpreted as a test of the strong, previously resistance area, now to reverse role, and act as support. I have included a weekly chart to illustrate. The down-sloping trendline and red horizontal line show the point where I am expecting to see a bounce at .9200, back up to test the .9350 resistance zone.
Weekly Chart *Note Click on the chart to learn about our premium service.
Looking at this 4 hrly chart, we can see that price has remained firmly inside the up trendline. I have drawn a horizontal line to indicate the area that the bounce is likely to take place. The market is currently at a closing price of .9247, where there is evidence of very strong support, aided by the past resistance point on the left. It is very likely that we will see a bounce from this point.
4hr Chart
Ideally, however, I would personally like to see a test of that trendline, converging with the weekly support line at .9200. A good stop placement would be a 50-pip stop at .9150, thus making it a 1-3 risk versus reward ratio. If setup takes place in this manner, I plan to buy and scale out of my position in thirds.
So let us be ready to take advantage if this setup takes place, while at the same time keeping an open mind to see where Mr. Market wants to take us, and go along for the ride. After all, Mr. Market is never wrong.
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Happy and Successful Trading to All!