Buying the Pullback in AUD/USD at the 50 SMA

AUD/USD has resumed the bullish trend again this week, so we decided to buy at the 50 SMA since it has been providing support on pullbacks

Skerdian Meta•Friday, November 1, 2019•1 min read

The pullback is complete on the H1 chart

[[AUD/USD]] has turned quite bullish this month. At the beginning of the month the price was trading at the lows, around 0.6670-80. But it reversed higher after the US ISM manufacturing report early this month, which showed that this sector fell deeper into contraction in the US during September.

As a result, the USD turned bearish and this pair turned higher at the beginning of this month. Then, the US and China reached a partial trade deal which helped improve the sentiment further in financial markets and risk assets surged higher, Aussie included.

Last week, AUD/USD retraced lower, which was due after the two-week climb. During that retrace, the 50 SMA (yellow) turned into resistance on the H1 chart. This week, the uptrend resumed again and the 50 SMA turned into support, helped by the 20 SMA (grey) as well.

Last night, the price bounced off the 50 SMA but it retraced back down there during the European session today. AUD/USD is finding support at this moving average again, so we decided to go long from here, since stochastic is also overbought, indicating that the pullback is complete.

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.