The AUDUSD trade setup: Just short of our third target

Toward the end of the last week, we saw how the Aussie made a strong rally and broke above the 0.8065 previous intraday high. On August 7, we called for this rally and even provided possible entry parameters with entry, exit and target prices. The following is the update and the result of the setup.

On 7th August, we wrote a post about the triple zigzag pattern that completed in AUDUSD on the short term frame. It was important to wait for a breakout as this would show price commitment to the direction of the forecast.  The triple zigzag was the 4th wave of an impulse wave that started early May. The 3rd wave topped at 0.8065 and we expected the 5th wave to break above unless there would be a truncation. The chart below was used

AUDUSD Elliott wave analysis

AUDUSD Elliott wave analysis, H2 (click to zoom)

The drop was measured by a precise double zigzag pattern. Price responded positively to this and now making a correction. There could be a really good opportunity to buy at the 50% retracement of the correction or slightly deeper. The following is how we can take advantage of a resumed bullish move.

Trade Idea: Buying zone at 0.7860-0.7880.

Stop loss (Invalid level) at 0.7800.

Target 1 – 0.7967.

Target 2- 0.8049.

Target 3: 0.8131.

Final Target – 0.83.

AUDUSD Trade Setup result : Target 2 achieved

This setup played out perfectly and went to hit the second target (169 Pips) and was just 6 pips away from the third target (251 Pips). The risk attached was just 80 pips which means that 1:2 R/R has already been achieved. Price could still make a way up to third and final targets. Stay tuned for more analysis, forecasts and trade ideas.

Does this post help in any way?. Please let’s know by your comments below.

 

 

 

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