AUDUSD – BUY – 6th February

AUDUSD – BUY – 6th February (Closed)

Good morning Forex Kings,

Trump has been acquitted of his impeachment trial on two counts this morning.

The USD strengthened overnight as ADP employment change came in well above the forecast. However the USD is now at a major resistance level.

Furthermore the AUDUSD moves in an inverse correlation to the USDCNY (Chinese Yuan). As part of the trade war phase one agreement China agreed to keep their currency at a certain rate. Due to the corona-virus the Chinese currency has devalued to a key level, this suggest the Chinese currency may strengthen from here, pulling the AUD with it.

USDCNY – Daily Charts

As you can see during the trade war agreement the Chinese currency strengthened against the USD. This week the currency pair re-tested a key trend line, we may now see USD devaluation against the CNY (meaning AUDUSD could make a bullish move).

This morning at 11:30am (AEDT) Australia will report its retail sales, imports and exports. We are anticipating a positive result due to the holiday period. This may also put strength into the AUDUSD.

AUDUSD – Daily Time Frame

The next key level can be found at the 0.6800 handle.

AUDUSD – 1 hour

Looking at at the 1 hour time frame, there appears to be an inverted head and shoulders pattern after a bullish move yesterday.

We are now looking to buy on the right shoulder line.

Trade Set Up: BUY MARKET ORDER, Stop loss, 0.6710, take profit set at 0.6796

Stop Loss: 36 PIPS

Take Profit: 50 PIPS

Trade Setup
BUY

Entry
0.6746

Take Profit
0.6796

Stop Loss
0.6710