Yesterday on the 6th of May, 2020, I released an analysis advising that traders sell the AUDUSD pair due to the formation of a mini double top pattern. In this post, I will be conducting another AUDUSD analysis.
A screenshot of the said post can be seen below.
Price continued downwards until it reached the support at the 0.6377 region. Upon touching the support, the price reversed quickly and rose above 0.6462. This price movement led to the formation of a much wider double bottom pattern. This new pattern formed was confirmed earlier today with a long bull candle closing above the neckline at 0.6464.
The image above shows that the downward price movement was just really some sort of correction to the previous uptrend, rather than a full reversal.
This can be said because a similar scenario has occurred earlier in the 17-day old uptrend.
Given that the week is about to end, this move will most likely spill into the coming week.
It is recommended that traders buy the pair above 0.6464 with take profit about 28 pips (green line) from the current trading price as at the time of writing this post.
However, if you wish to grab more, do remember to place your take profit before the next major resistance.
The basis for our profit target can be seen in the image below.
Our recommendation is further backed by a moving average crossover under the candles signalling a change in direction of price to the upside.
In conclusion, traders should always exercise caution when trading the forex market. This is because trading the forex market is very risky and can lead to partial or complete loss of capital if necessary precautions are not taken.
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