Trade Example – AUD/USD

Filed under: Learn Forex Trading |

 

I have a forex price action trade example for you today on the AUD/USD currency pair, which is the pair for the Australian dollar and the United States dollar.

 

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the AUD/USD pair and it is the timeframe that we look at to assess the current trend. As you can see, the trend is up, with the 8-day EMA crossed above the 21-day EMA. Price has also recently crossed above a good level of support/resistance. Price then retraced a little bit and hit this level once again. Although price has been moving up recently, it has not been moving in a straight line, as it rarely does, and there has been a stepping motion. We are looking for this stepping motion to once again resume at the area of support/resistance that we have marked in on the chart.

 

Figure 2.

Figure 2 shows the 4-hour chart for the same AUD/USD pair. You can also get a clearer picture of that support/resistance level with this chart. And zooming in on the 4-hour chart even more (see Figure 3), you will see that a very nice bullish pin bar formed right at our level of support/resistance. This might have been a good place to put an order in to go long at the break of the high of the pin bar. Our stop loss would have been placed just a few pips below the low of this pin bar, with a target set of two times our risk. As you can see, price then resumed the upward momentum, and our target would have been met for a very nice 2% rise on our bank. That’s all that I have for you today, and I’ll be back tomorrow with yet another forex price action trade example.

Figure 3.

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