Buy AUD/USD | Range trading
Updated: Feb 20
AUD/USD has been stuck in small range after sharp fall. Its oversold condition requires a correction. If it doesn't correct by a significant upward retracement, it can stagnate in range for many days to correct its oversold condition.
Having seen improvement in economic data from Australia since December, Wage Price Index q/q on Wed and Employment change on Thu are more likely to be in line with forecast or better; which may cause enough upward move to touch at least upper band of Bollinger. Therefore, we have entered one more buy trade and holding onto both of them despite previous setup of look alike Double Repo seems to be off the table; nevertheless we should see today's closing to determine whether or not previous setup gets invalidated.
Here is how we have entered today and modified our positions:
Bullish divergence: Price has recently been making lower lows but MACD has been making higher lows, which makes a Bullish Divergence. If MACD makes a lower low before the price touches upper band of Bollinger (our TP); setup will eventually fail, the last hope for bulls will be dead and we will no longer be in long/buy in AUD even for a short term trade.