Live Trade – AUD/USD

Filed under: Live Trades |

I currently have an order in on the AUD/USD forex currency pair, which is the pair for the Australian dollar and the United States dollar. If you take a look at Figure 1, you will see the 4-hour timeframe chart for the AUD/USD pair. What you will see on this chart is that price is visibly moving down, with the 8-period exponential moving average crossed below the 21-period exponential moving. There is also a nice level of support/resistance that I have drawn in on the chart (marked with a horizontal green band). If you flip to the daily chart, you will also see that this level is significant going back further, and that the 8-day EMA is also crossed below the 21-day EMA on the daily chart as well. This all tells us that if we enter this market, then we need to be going with this dominant bearish momentum.

Picture 1

Figure 1.

You will see on the chart that a nice bearish pin bar has just formed that is bouncing off of our area of support/resistance. Therefore, I have put an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar, and target set of three times our risk (which also happens to be the area of the low of the chart).

 

My only reservation about this trade is that price is slightly moving sideways in a range and it seems to be sticking to our area of support/resistance a little bit. However, the risk-reward reward scenario available for me justifies being in the trade. Well, that’s all that I have for you today – and I’ll keep you updated on the outcome of this trade as it progresses during next week if our order in filled before the close of today.

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