For the first time in months, the AUDUSD has managed to close a week decisively above the descending resistance for a long term 1+ Year triangle.
The breakout could be an early indication of a new bull trend after one year and a half of consolidation. However, the price has landed at a key swing high and horizontal resistance at 0.7835. Which remains in my view the key to further serious upside.
We can trade this according to price developments. Two possible scenarios or ways to trade this :
if we see a correction forced by this resistance at 0.7835, that could provide a new buying opportunity on the retest of the broken descending resistance for the triangle. In that case, time your entry on a lower time frame chart by a confirmation signal.
Alternatively, If we don't see a correction and the ongoing rally continues and break above 0.7835 on a weekly basis, that would confirm the upside scenario. Simply, i would buy short term pullbacks in this case.
Full target for the triangle breakout points to areas near another long term resistance level around 0.8660. A shorter term target could be at 0.8160. Initially, i would mark a breakout below 0.7570 as an invalidation for this view.
The breakout could be an early indication of a new bull trend after one year and a half of consolidation. However, the price has landed at a key swing high and horizontal resistance at 0.7835. Which remains in my view the key to further serious upside.
We can trade this according to price developments. Two possible scenarios or ways to trade this :
if we see a correction forced by this resistance at 0.7835, that could provide a new buying opportunity on the retest of the broken descending resistance for the triangle. In that case, time your entry on a lower time frame chart by a confirmation signal.
Alternatively, If we don't see a correction and the ongoing rally continues and break above 0.7835 on a weekly basis, that would confirm the upside scenario. Simply, i would buy short term pullbacks in this case.
Full target for the triangle breakout points to areas near another long term resistance level around 0.8660. A shorter term target could be at 0.8160. Initially, i would mark a breakout below 0.7570 as an invalidation for this view.