audusd price action squeeze

 

The AUDUSD daily chart has been experiencing some high churning sideways action during the last few weeks of trading. Although the market looks very congested at the moment there does look like an emerging chart pattern here. The situation is simple, the market is having trouble moving past an overhead resistance level. All attempted rallies past the containment line are terminated quickly.

That being said, the market is also refusing to move into lower prices. The mean value is containing price from moving lower is it acts as dynamic support. What we’re seeing here is classic price wedging between the resistance level and the mean value. Generally in these situations, it’s the momentum of the market that prevails overall. Therefore we’re expecting a bullish breakout to occur soon here on the AUDUSD.

Interestingly enough, the Daily chart produced a bullish rejection candle buy signal off the mean value last session, further solidifying our upside bias. Savvy price action traders could look to grab retracement entries here, but breakout orders at the highs would nicely confirm bullish momentum.

 

Trade Progression

audusd breakout trade

 

We recently just looked over a potential buy situation on the AUDUSD daily chart. A price wedge candlestick pattern forming under resistance with increasing bullish pressure. To put the icing on the cake, a strong bullish pin bar formed in line with the bullish momentum, and our bullish bias.

As anticipated, a strong upside breakout did occur here. The bullish pin bar drove prices out of the wedge and through the resistance level which was containing price. The market is one swift move was able to hit our 300% ROI target which is excellent. The retracement entry was triggered which allowed a 300% target to be achieved so easily.

Thankfully the trade target was triggered as the Australian Dollar was unable to maintain these higher prices. Although personally, I was expecting a much longer term bullish breakout, the previous resistance level failed to hold as support and price sold off aggressively as a result. The markets are in the middle of the Summer trading season at the moment, so thisĀ sort of aggressive direction changing is to be expected.

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