The Aussie rejects a trend line support on Friday and in doing so has confirmed a downward sloping trend channel formation.

Given the overall structure of this chart at the moment this looks like something that could lead to a buy set up.

The channel appears in blue on the chart below. I have used the channel function in Tracker's drawing tools for this.

At this stage this channel looks to me as though it may end up forming the 4th swing in a 5 swing advance as I have labelled on the chart. If this turns out to be the case, a break through the top of the channel could set us up for the final swing higher in this particular advance

This puts this channel in a similar position to the NZD: USD broadening triangle set up I posted on Friday

AUDUSD - Daily. Source: CMC Tracker
One approach to strategy would be to buy on a confirmed break through the channel resistance. Many traders would apply a price and/or closing filter for their entry strategy rather than buying as soon as price breaks the resistance.

The preliminary target here assumes the next swing up will be the same size as the first swing. This is common behaviour for these structures. To do this I have used the Fibonacci price tool to project the length of swing 1 from the lowest point of the trend channel (this may change if the we get new lows in the channel prior to a break through the top)

If we get a set up, I'll post some further thoughts on stop loss management and profit objectives

Cheers

Ric