I have previously detailed my reasons for being largely bullish on AUDUSD.
IF my assumptions are correct, I believe we are at a point of great opportunity to capitalize on buys for this pair. If you check on the monthly TF, you will realize that we may be looking at a potential inverse head and shoulder in case the price shifts to bullish (formed by the head at 0.55000 and the shoulders at 0.70000 key levels).
Price has, as at close of last week (10th June), closed at a key level where price was pushed bullish to create a high at 0.72650 on 4th May 2022. The push to the upside came from the level where price is at currently, 0.70475 key daily level. Looking at the bullish pressure which lay here during that push, it is a probability that price shall once again take off to the highs.
A look at the daily chart also implies that IF price pushes to the upside at this level we will have an inverse head and shoulder pattern to take on as confluence for buys on the pair.
A look at the H4 chart I have shared will inform of three key things: - We are at a level of demand (if you will, not exactly a master in demand and supply). -We crossed the green trend line that was dropping since April 5th, 2022 to the upside. This trend line was acting as resistance. Once we crossed to the upside on 23rd May, we crossed over to the buy side of the trend line. We had a retest of the same line on the 25th of May and since then went bullish. -Lastly, and probably most importantly, we breached the lower swing high at 0.72660 to create a new higher high. This shifted the entire structure to bullish for me (I use swing highs to determine whether price is still within a range not. LTF structure can determine intraday trading but the swings determine overall structure for me). Based on this, the fib retracement stopped being bearish and now I am placing it from bottom to top. The wick took out the swing on 3rd June and I can comfortably adjust to buying the pair. Currently, we are at the 50% retracement on the upswing. We may move a little further down and tap the key monthly level at the 61.8% fib before we go completely bullish, but I am keen to note how price behaves hereon and whether I can get buys at these levels.
NB: Price is bound to get magnetized into 0.7000 key psychological level to the downside from the current levels. If this happens, we will have confluence at 0.7000 and 61.8% retracement to expect a strong buy from this zone. Please note that the 0.70000 key psychological and heavy monthly level has been used on numerous occasions before to send price soaring to the highs. This is a key level of focus for me.
How I intend to Trade: IF price shifts structure to bullish on H4 from the 50% (where we are) or the 61.8% (0.7000), I will be very keen to take on buys for the long term, aiming at least at 0.8000 key level and potentially take on a position trade all the way to 0.90000 or 0.95000. IF, however, this switch fails, I will have to reevaluate my bias on the pair.
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