Timeframe: W1
Recommendation: Long Position
Entry Zone: 0.8950 – 0.9050
Take Profit Zone: 0.9675 – 0.9800
Stop Loss Zone: 0.8650 – 0.8700
The AUDUSD has been in an overall corrective phase for an extended period of time after it broke down below parity. The correction took this currency pair from an intra-day high of 1.0856 to an intra-day low of 0.8659 from where it broke the downtrend in favor of an upward move. This week’s sharp drop took the AUDUSD down to its Fibonacci Retracement level which also coincides with a strong horizontal support level
Forex traders should monitor price action between 0.9000 and 0.9050 which is expected to be strong enough to prevent a breakdown. Forex traders should consider splitting their lot size into multiple entry positions between 0.8950 and 0.9050 in order to decrease the risk on this trade. The downward potential appears to be rather limited while the upside potential remains very attractive.
