By: John Ursus
Timeframe: W1 Recommendation: Long Position
Entry Zone: 0.8850 – 0.8875
Take Profit Zone: 0.9450 – 0.9500
Stop Loss Zone: 0.8600 – 0.8625
The AUDUSD has sold off heavily before launching a reversal rally which was partially fueled by short-covering which allowed this currency pair to visit its Fibonacci retracement levels before resuming its correction.
This currency pair has now formed a double bottom formation which could initiate a reversal once again fueled by short-covering as a double bottom is a bullish chart pattern. The downside risk is rather limited around current levels and trader should anticipate a reversal over the next few trading weeks.