Trade note on AUD/USD 16 July 2018
If we see weakness coming through on the Dollar index (DXY) from current levels we might just see the AUD/USD currency pair move higher from the 0.7448 level.
Dollar index (DXY)
The Dollar Index (DXY) might just see more weakness filtering through this week as shown in the chart below to a first target level of 94.20. If the price action does not move lower from this level we might just see the price reverse higher which will negate our long trade on AUD/USD.
In this note, I detail the technicals on the chart and the trade summary.
Technical outlook: looking at the 4-hour (H4) time frame we see the price action trading higher than the 50-day simple moving average (SMA) which might give some support to the price action moving higher. We need a break through the 0.7443 level and preferably a daily close above this level to confirm the move higher. On the daily time frame, it looks like an inverse head and shoulders (IHS) technical pattern has formed and is currently testing the neckline for a break higher.
- Entry (Buy): 0.7448
- Stop loss: 0.7374
- Target Price 1: 0.7513
- Target price 2: 0.7567
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