I provided a full fundamental report yesterday in telegram with our theory behind a potential weaker US Dollar scenario this week. The DXY has a number of bearish technical signals on the longer term time frame suggesting a weaker DXY, which aligns with the fundamentals. With this in mind, we are taking a look at the AUDUSD which has set up a series of bullish technical patterns.
AUDUSD 4 Hour Chart
From the wave 2 or B low, there has been a bull flag breakout which appears to be an a-b-c corrective decline. We are using the 0.6958 resistance as our BUY entry price.
AUDUSD 1 Hour Chart
There is also a possible inverted head and shoulders structure in play which indicates a bullish reversal in the market.
Trade Setup: BUY market execution, current price 0.6958, stop loss 0.6868 and take profit target 0.7218.
Stop loss: 90 pips
Take profit: 260 pips