AUDNZD – Price explodes out of double inside day setup

AUDNZD has been a chart we’ve had under intense observation after a double bottom occurred off a monthly support level last month. Price bounced up higher and is now trading on the bullish side of the mean value giving us a bullish bias on the daily chart.

After a small correction back into the mean, price consolidated tightly and printed two cascading inside days. This is a very solid catalyst for a strong breakout here, we’re watching exclusively for breakouts of the highs inline with the bullish momentum. Buy stop orders can be used to catch breakouts without having to be at your trading screen, that way you don’t have to spend hours in front of the charts waiting for something to happen.

If a bullish breakout occurs we will probably see the next extension upwards into new highs from this up trend.

The Breakout

As anticipated the double inside day formation did cause a violent breakout to the high side when price breached the highs of the setup. Funny enough a strong bullish rejection candle formed right after the double inside day setup, strengthening the long position.

Now the market has broken up higher and extended away from the mean, we can start to expect a mean reversion to occur. We will be waiting for the previous resistance level to act as support to confirm a new swing level within this uptrend. This position will be a nice ‘hot spot’ for bullish price action reversal signals to form, as the area also coincides with the mean value.

When the market produces nice stable trends like this we’ve got to take full advantage of them. This trend has a nice structure to it and definitely looks like we will eventually see much higher prices develop out of this market, so keep your eyes peeled for the next bullish trade opportunity.