The AUD/USD is breaking above a short term trendline, and I think it’s a reasonable by trade right now.

Here is the chart:

The pair has been in a severe downtrend for a few days and could really use a nice correction, at least temporarily.

We talked about the AUD recently, and the trade that we talked about is open and moving along. 

Click here to see the original trade idea.

For now, the profit target stays the same: the green BaseLine, and it could take days — even a week or more — to either stop out or take profit.

Here is a base (green) trendline on the daily AUD/USD.  It’s delicious.

Now let’s take a look at what is happening with the pair.  It has already broken the EntryLine (the blue trendline) and we’re heading downward.  I like the movement we’re seeing on this pair and it looks like we could be in for a decline down to the .9400 mark.

Wombats are angry! 

It is Friday afternoon and this is close to the 9600 area.  Even so, a good close below that area would trigger sell trade. Stop loss above .9635.  Target is the green line or .9555 or so.

-Dave

The AUD/USD did break below the blue trendline at .8683.  That triggered a short trade, with a stop at least 10 pips above the high the pair had made before the break of the trendline.  The trade then stopped out with about a 20 pip loss. 

Okay, here’s round 2 of AUD/USD.  This is the 30 minute chart, and you can see the top of the old channel near the bottom of the chart.  And I’ve drawn a new trendline.  A break of the new blue trendline could take us home to the top of the channel.  Watch for the Winnipeg move on the breakout.

The AUD/USD trade idea that we talked about never happened.  The pair just took off upward and didn’t return.  I’ll have some more ideas about it soon, but for now consider the trade idea a long way off (but still valid).