The Australian-US Dollar is currently trading within a range between 0.7480 and 0.7330 and in a narrower range comprising 0.7440 to the top and 0.7350 lower end. This range is becoming increasingly sqeezed and the pair is now trading within a traingle pattern. Within this range, there are lower highs and higher lows. Break on either side could yield significant number of pips.
Overrall, the range is still between around 0.7480 and 0.7330. It is very difficult to say which way it will go as the pair seems happy playing this range, for now.
The best method to trade for now is is to sell the rallies near 0.7480 and buy the bearish movements down near 0.7330.
When the range eventually does break, we favour a move to the downside. The least path of resistance seems to be on the downside as the longer term downward trend line the price will have to overcome as well as significant moving averages offer stiff resistance on the daily timeframe.
A daily close below 0.73 break would likely speed up falls to the 0.72 to 0.7180 vicinity and after that target will be 0.70.
For the more dearing, there are opportunities to sell in the 0.7440s and buy in the 0.7350s. These levels are providing horizontal resistance and support, respectively. This can be seen in the two zones. The top one is offering resistance and the bottom support. These two levels repereent a narrow range within the broader range. Notice the price is struggling to settle above 0.7440 and below 0.73350.
So the best trade idea for now will be to sell short when the price goes above 0.7440 into the upper zone marked out by the grey horizontal bar, with a stop loss just above 0.7480. For profit, targeting the support region near 0.7350. Conversely, buy when it approaches 0.7350, in the support zone, targeting 0.7440 or above.
Eventually, this tight zone, that is increasingly getting narrower, will give way so the stop must be tight.