The Daily Trade – Day 45

Filed under: Learn Forex Trading |

Trade Number 45 – EUR/AUD 1-Hour Chart

Today’s daily trade comes on the EUR/AUD forex pair, one of the lesser popular forex pairs but one that I believe should not be overlooked as there are some good quality price action setups to be found.

 

Figure 1.

If we begin as always by looking at the daily chart (see Figure 1.), you will see that there is a nice strong area of support at the bottom of the chart, which had been firmly respected on three separate occasions over the past nine months or so. This makes it a very significant level and we should be looking for any price action setups on the daily, 4-hour, and 1-hour charts whenever price approaches this level.

 

Figure 2.

Recently, price has been moving down to this level once again, so I thought it was important to mark in the zone and watch it very carefully. If you now look at Figure 2., you will see that a really nice doji-shaped candle emerged right at this level, and a bullish engulfing candle followed this. This came after a strong move down, so it was a significant event. You could have taken a long trade at this point and set a stop loss just a few pips below the low of the move. Your target should have been at least two times your risk, and quite possibly more as a large bounce was likely give the strength of the zone.

 

Figure 3.

If we now turn to Figure 3., you will see how price reacted. It moved up… and then some! It never really looked back and you could have had a profit of many times your risk if you were brave. You certainly would have locked in a 2% rise on your bank. Well, that’s it again for this week, so I’ll see you again next week for more daily trades. Have a GOOD weekend.

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