AUD/USD Price Analysis: Bulls waiting to pounce on daily structure offering 1:5 R/R

Developing Story.

  • The monthly chart shows that the price is now taking on a supply zone, albeit with a good percentage drop already done.
  • AUD/USD bulls are lurking looking for a high probability setup for a long swing trading opportunity. 

There is something for both the bulls and the bears in a top-down analysis of AUD/USD, but the compelling price action has appeared on the daily chart from which a long bias exists.

Bulls will monitor the price action from a 4-hour time period to look for a bullish environment and higher probabilities of a successful swing-trading opportunity.

The following is a market structure analysis conducted on the monthly, weekly, daily and 4-hour time frames with an illustration of what a long entry might look like for a 1:5 risk to reward setup.

Monthly resistance

The monthly chart actually offers a bearish outlook as the price struggles in the distribution zone following months of non-stop bullish monthly closes.

A continuation of the distribution offers the potential for a short swing trade IF the daily setup doesn’t evolve on the 4HR time frame. 

But first, let’s keep monitoring for the long, (continue reading).

Monthly Fib targets and upside bias

If bears stay in control, the various Fibonaccis highlighted offer confluence target points. 

Weekly chart support target

The first weekly target is evident in the above graph. This level would be the first port of call for a short.

Weekly chart’s support zones

However, given the bullish trajectory, the support targets could give rise to long entry setups.

The daily chart offers long trade setup prospects 

For the meantime, bulls are waiting patiently for an opportunity in a third impulsive wave to develop for a daily chart swing trade. 

4HR prospects for the third wave

The price is below the structure, so there is still some work to be done by the bulls at this juncture.

1:5 R/R swing-trade setup

As can be seen, the environment us still not quite bullish with price consolidating below the 21 4-hour EMA.

However, on a break higher and a retest of the 21 EMA, and/or support structure, bulls can look for an entry to target a 1:5 risk to reward and high probability trade. 

This story will continue and price action will be monitored on the 4-hour time frame with updates along the way…

Update: Market melts away

As can be seen, the 4HR entry was never triggered and the market just melted away. 

The pair can be taken off the watchlist. 

From a daily perspective, the price is now in a barroom brawl zone so there is nothing to be done at this juncture and we are left to just monitor the price action.

If the price fails at the trendline support, a shorting opportunity could evolve against what will then turn into the counter trendline resistance.

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