Traders often use a higher timeframe chart on a currency pair (daily or weekly) to determine overall trend, and a shorter timeframe (hourly, 5 minute) for entry and exits of trend based trades. For mine, both charts and fundamentals have turned bullish AUD/USD – and the hourly chart is signalling……..
First, here’s the daily chart:
For mine, the downtrend is broken. This lines up nicely with what I see as a fundamental shift. The oversold situation in USD is easing, allowing further USD falls (ie AUD/USD up). And a modest improvement in jobs in Australia reported yesterday cracks the down trend in jobs data locally.
So, where to enter?
The three candle pattern on the right is close to a “morning star”, and has the important characteristics – a fall, an indecision candle (doji), and then a rise. This gives me an entry signal and levels for the following:
Buy AUD/USD at current market above 1.0265, stop loss below 1.0248
1.0265 is the high of the fall candle, 1.0248 is the low of the indecision candle.