Following on from by Forex Market Breakdown Volume 4 youtube video, I mentioned how EUR/AUD was in need of a pullback and formation of a new lower high to give-way for further downside momentum.
Looking across the higher time frames, price has been very clear of its rejection of the strong historical levels between 1.6000 & 1.6200. Look back to the start of time on this pair, these levels have held strong every since...
Since its decline from 1.62000, we can see very clearly on the weekly time frame price consolidating within a daily/weekly range. This stretches between 1.57500 and 1.6000. Multiple wick rejections of either side which confirm to me that price is very indecisive and although my long term bias is bearish, bullish momentum could still win the battle and price could very much still rally to the skies.
However, a long entry is not something I will act upon.
On the daily time frame, since price has been trading below 1.6000, this level has acted as significant support with triple wick rejections of this zone. Furthermore I have highlighted a short term range bound zone marked by the yellow support and resistance zones. I will not mention these in detail, they are pretty self explanatory.
On the lower time frames, specifically the 4hr chart we can clearly see price forming its new lower high after rejecting the short term support highlighted by the yellow zone. On the hourly time frame price has also broken short term bullish trend structure and perfectly retested a key entry zone also highlighted in yellow. I will not mention why this zone is so significant because some secrets are best kept that!
Anyway, 1.58200 is the next downside target and once broken below its all eyes on 1.57500. Lets get it!
Looking across the higher time frames, price has been very clear of its rejection of the strong historical levels between 1.6000 & 1.6200. Look back to the start of time on this pair, these levels have held strong every since...
Since its decline from 1.62000, we can see very clearly on the weekly time frame price consolidating within a daily/weekly range. This stretches between 1.57500 and 1.6000. Multiple wick rejections of either side which confirm to me that price is very indecisive and although my long term bias is bearish, bullish momentum could still win the battle and price could very much still rally to the skies.
However, a long entry is not something I will act upon.
On the daily time frame, since price has been trading below 1.6000, this level has acted as significant support with triple wick rejections of this zone. Furthermore I have highlighted a short term range bound zone marked by the yellow support and resistance zones. I will not mention these in detail, they are pretty self explanatory.
On the lower time frames, specifically the 4hr chart we can clearly see price forming its new lower high after rejecting the short term support highlighted by the yellow zone. On the hourly time frame price has also broken short term bullish trend structure and perfectly retested a key entry zone also highlighted in yellow. I will not mention why this zone is so significant because some secrets are best kept that!
Anyway, 1.58200 is the next downside target and once broken below its all eyes on 1.57500. Lets get it!
Comment:
Since posting this short setup, price made a dive back into short term support at 1.58200. However, this level held strong and price went on to leave me in the dust! We no hover around the strong daily key level of 1.60000 (Daily range resistance). We must watch this daily close with precision. If price closes above 1.6000 on the daily time frame then my bearish bias has been invalidated and I will not look to trade this pair until further notice. However, I will re-evaluate my short bias if price respects this level.