AUDCAD – typical price action setup

Tomasz Wisniewski Axiory Global Ltd.

When trading on the FX Market, we should not stick only to the majors, so the most popular currency pairs. If you are a technical trader, you can find perfect occasions anywhere. It is just the matter of conducting a proper research and analysis. A very good price action setup, can be now spotted on the AUDCAD, so an instrument, which is not the first pick for the majority of traders.

On the daily chart of the AUDCAD, we can now spot an Inverse Head and Shoulder pattern – a bullish trend reversal formation (blue rectangles). Trading signal is quite strong here because it is additionally supported by other factors, not by the one pattern alone. First one is the breakout of the down trendline (purple), which happened in the middle of December. That line was defended as a support at the beginning of the year. Second one is the flag (blue lines), which was created after the price broke the horizontal neckline (orange). Flag shows us a typical price action movement, so a test of the recent resistance as a closest support. Test resulted with an upswing and a breakout of the upper line of this formation, which actually triggers a mid-term buy signal here with a target around the red area (100 pips higher).

Buy signal is on the table as long as we stay above the neckline (orange area). Comeback below that level is currently less likely to happen.

Author

Tomasz Wisniewski

Axiory Global Ltd.

Tomasz was born in Warsaw, Poland on 25th October, 1985.

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