An Upcoming BUY Setup On AUDUSD By Breakout Pullback Strategy

Forex Analysis #7

A breakout pullback setup in AUDUSD

Hey there, TraderSaan is here.
Today I am going to share a upcoming BUY setup in AUDUSD. I will go through the step by step process like entry, exit, stop loss and reason behind taking this trade.

The strategy I am going to use is called BREAKOUT PULLBACK strategy. If you don't know about the strategy, please pay a visit to the link below.
The Breakout Pullback Strategy For Trading

I am actually a swing trader, meaning I hold my position for 2-3 days or more. So I usually trade at the timframe of 4 hour (H4), 1 hour(H1), or occasionally at 30 miniutes (M30). And one more thing is that I analyze the chart in tradingview and take trade in MT4 (for FOREX) and Binance ( for CRYPTO).

First I will cover the fundamental part and then will give an insight in the technical chart of AUDUSD

Fundamental Outlook: Bullish

USD
• The fundamental of USD is neutral as the Fed is about to rate hike but the chairman of Fed has uttered about the uncertinity of the world economy.

AUD
• The commodity market is booming after the Russia-Ukraine war as the major supplier (Russia) has been banned by the sanctions of NATO and Joe Biden.

• The Australian economy is recovering from its post COVID damge. So they are about to rate hike.
That's why I am bullish on AUD.

Technical Analysis

• In D1, the technical chart of AUDUSD: price was in a downtrend since March,2021 (the time when market hit by COVID pandemic). Price was resisting by a beautiful downtrend line. But currently, price has broken the downtrendline to the upside - it indicates that market has got some buyers and not anymore in the downtrend.

AUDUSD, D1, price has broken big trendlind to the upside

Image source: tradingview, prepared by me

• For the indicator confirmation, I typically use Moving Averages like 20, 50, 100, 200 MA. Here, in the chart below, I have used 50 & 200 MA to check the momentum. Here 50&200MA are beautifully aligned upwardly which indicates the buyers are in control.

AUDUSD,H4, 50&200MA are aligned upwardly

Image source: tradingview, prepared by me

• If we consider the H4 chart of the AUDUSD, it has broken a resistance few days ago and now it has come to the broken resistance zone which means price has already made the pullback move and it seems price is ready to go up as I have shown in the chart below. And the possible selling pressure could come in the previous resistance zone which I have shown with the dashed line (TP1,TP2). If I take trade, those line will be the price level of my Target Profits.

AUDUSD,H4, pullback move has happened

Image source: tradingview, prepared by me

• Price has made a Bullish Engulfing pattern in the support zone(broken resistance turned into support). So, this is exactly where our entry point will be. So when market will open in 11.04.2022 (As I am in India), I will jump into the market for buying the pair AUDUSD.

AUDUSD, H4, Bullish engulfing pattern is formed in the end of the pullback move

Image source: tradingview, prepared by me

• Now that we are ready to buy the pair, we need to know the exact place where to exit (in both situation - in loss or in profit). Let's see

Entry price is at 0.74333, shown with a black coloured line the chart below.

Stop Loss is at 0.73612, that's only 71 pips away from entry price, shown with the red coloured line in the chart below.

Tareget Profit: For this trade I have set two target profits - TP1,TP2.

TP1 is at 0.76582, that's 226 pips of target. Risk to reward ratio is of 1:3+
TP2 is at 0.78047, that's 372 pips of target. Risk to reward ratio is oof 1:5+

AUDUSD, H4, ENTRY, SL, TP

Image source: tradingview, prepared by me

This completes my upcoming buy setup on AUDUSD

I always take a trade when my fundamental and technical analysis say the same thing. As follows:

Case I
Fundamental = buy, Tchnical = sell, that implies Not To Trade

Case II
Fundamental =sell, Technical = buy, that implies Not To Trade

Case III
Fundamental = buy, Technical = buy, that implies Jump In For Buying

Case IV
Fundamental = sell, Technical = sell, that implies Jump In For Selling

Disclaimer: This is not any financial advise or trading mantra. My purpose is to help traders to learn. This post is made for completely educational purpose. Hope it helps.

Thank you very much if you make it to the end. Happy trade.