A Range Bound AUDUSD Provides Opportunity for High Frequency Trading

The AUD/USD set a fresh yearly high last week on four separate occasions but remained in a tight range over the period which it has maintained despite a pick up in broader volatility. The defined price action provides an opportunity for high frequency traders to execute their strategies with limited risks.

[U][B]Key Technical Levels[/B][/U]

The AUD/USD has traded within a 150 pip range over the past week between 0.8550-0.8700 as we have seen bullish momentum wane after the pair failed to break above the 0.8700 level. Today, there was considerable volatility at the onset of the trading day on concerns over a potential trade war between the U.S. and China but the AUD/USD has maintained its current range creating the potential for profits using scalping based strategies.

[U][B]Quantitative Metrics[/B][/U]

We are seeing a wide width for the Bollinger band on a daily chart for the AUD/USD which is a bit concerning, but the ends have started to turn inward which could be the beginning of a narrowing period. We have seen over the past two reports that the GBP/JPY and USD/CAD both saw breakouts after their width became too narrow. Therefore, identifying the beginning of a narrowing period could be more beneficial as traders may have more time to profit from their strategies. We have also seen the ATR decline over the past few months despite the pair’s ascension as gains have been made in small increments increasing its attractiveness for intra-day trades.

[U][B]Click For Additional Info on Scalping Strategies[/B][/U]

[I]To discuss this report contact John Rivera, Currency Analyst: [/I][I][email protected][/I]