AUD/USD squeezes in some inside time.

I have not traded the AUD/USD for a few weeks. I missed the dip and the rip from the mid .05’s to the mid .03’s  and had a hard time reaching with the shallow pullback that were just not making me feel comfortable enough early last week.  Now I see a specific set up that I like, post expansion ranges moves.

For two days, the currency expanded higher from the pivot point around 1.0500 to the 1.0600 with last Thursdays pullback. Just what I wanted to see. Today we see a rest and inside range compression.  This is good for traders like me that wont reach for breakouts, and likes to see the real buying come in to re-define a new range after the range expansion had occurred.  Bottom line, I’m about to get long the audusd on a pivot up above 1.0579 and add to this if it breaks the 1.0587 point of interest. Targets can be seen on the charts as the congestion is cleared ( see circles). Scaling out is a must!

The trade, in my opinion, would fail technically if it moves back under 1.0510. You might think these are too tight but the pattern setting up defines a rest period post range expansion (see the circle) which should hold true and contain the lower pressure.

The Daily chart shows us the inside day(s) post range expansion (blue circle).

Some simple trend lines (white lines) define the ranges and potential range highs which can be used as longer term targets.

The yellow circle shows us the series of trading days under the 50 sma that really only lasted a week. Trapping aggressive bears. Since then, we have trended above the 50 sma and pressed a rolling 30 day high. This dip I’m highlighting is what I like to see.

AUDUSD Day Chart

AUDUSD Day Chart

The week chart shows a nice longer term view of the consolidation ranges on a weekly bar base since last December.  Now we see two congestion / resistance zones I defined with the green circles. The blue circle is where we are now or the past few weeks.  A move to press these highs would bring some nice momentum to ultimately test the Jan/Feb. ranges (far left green circle).  Why show this chart? This gives us a nice big – picture view for potential levels to scale out of if we hit some closer targets. We always want to maximize our gains.

AUDUSD Week Chart

AUDUSD Week Chart

Nick Pirraglia


Disclaimer: The material provided is purely for educational purposes only. No information contained herein is a solicitation or offer to buy or sell any securities. The information provided is in no way investment advice from Nick Pirraglia, TradersThinkTank or any other contributed content. The opinions, analysis and commentary on this website are purely the subjective views of the author. Nick Pirraglia is not a Registered Investment Advisor and under no circumstances should any content from this site be used as investment advice, recommendations, or trading advice. Please consult your financial advisor prior to making investment decisions.

About Nickolas Pirraglia

Nick Pirraglia started his career in trading in 1991 after returning to the US as an Army Officer deployed in Iraq. He began as a bond broker and worked his way into trading. Expert mentoring, hard work and a disciplined approach to the markets has allowed Nick the ability to maintain a very successful career in Capital Markets and Trading for over 20 years as a professional OTC Market Maker and independent trader. Nick has also managed the trading desks for a two Dallas based capital management companies and traded equities for a Dallas based hedge fund. Nick has trained and mentored thousands of customers in the rigors of trading, technical analysis and risk controls. Recently, Nick had broadened his market experience through the design and product management of two automated trading platforms. He has the pleasure of working with some of the brightest minds in the trading community and has collaborated with experts in data, design, engineering and trading psychology. An avid long distance runner, Nick completed several marathon events, qualified for the Boston marathon, completed several long distance Triathlons to include finishing a full Ironman triathlon.
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