Timeframe: D1 Recommendation: Long Position
Entry Level: Long Position @ 0.8225
Hedge Level: Stop Sell Order @ 0.81250 (Take Profit Level @ 0.8000)
Take Profit Zone: 0.8550 – 0.8600
Stop Loss Level: 0.8100 (We will not use a stop loss order and execute this trade as advised below)
The AUDCHF has corrected sharply after trading inside its horizontal as visible in this daily chart (D1). This currency pair is now trading inside its horizontal support level which is marked in blue in the above chart. We expect the AUDCHF to rally higher and back into its horizontal resistance zone which is marked in red.
MACD indicates that momentum is improving, but it remains in bearish territory. We expect the histogram as well as moving average to approach the centerline during the expected move higher. RSI is trading in extreme oversold territory and a breakout should initiate the rally.
We recommend a long position at 0.8225. We also recommend a stop sell order at 0.8125 with a take profit target of 0.8000 in order to hedge our initial long position. We will not add further long positions to this trade.
Traders who wish to exit this currency trade at a loss are advised to place their stop loss order at 0.8075. We will not use a stop loss order and execute this trade as recommended. Place your take profit order at 0.8575.
Here are the reasons why we call the AUDCHF currency pair higher:
- The AUDCHF currency pair is currently trading at its horizontal support level
- MACD indicates that momentum is improving and bearish pressures are fading
- RSI is trading in extreme oversold territory and a breakout should initiate the rally
- Profit taking in order to realize trading profits which will start a short-covering rally
- New long positions by institutional swing traders
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.