I’m already in this trade short from a previous level hit. I’m considering stacking in pending how it reacts over the next week or two. The Aussie/Dollar (AUDUSD) has been in a rising channel for the last few months, recent making it’s 5, and possibly final touch. Range-bound on the top end by a strong resistance level set back in May of 2015. It has been slowly working it’s way back up and may provide one more entry point at the top of the channel. However, should it breach below the trend line, we could see the move I’ve been waiting for, taking the AUDUSD down to the .65 level predicted last year. I’m less concerned with the long-term direction on this one, and more the entry point.
If price manages to break below the channel, I will be looking for a correction back up to the bottom of the channel for entry. If price bounces and remains range-bound, I’ll be looking for entry the next time it touches the top, which does coincide with the May 2015 levels, likely around .780.
Longer term, weekly chart shows a nice, predictive divergence pattern set up. Previous move gave divergence, followed by a nice correction and continuation of the trend. I believe this is setting up again. When this breaks, there are between 1000 and 1400 pips, depending on whether we enter at the top or bottom of the channel.