On the daily time frame, Once 1.60500 was broken above, I initially believed my bearish bias was invalidated and we would see price obtain new highs. However, to be a great trader we must become un-attached emotionally to specific ideas and uphold flexibility to be able to quickly shift our bias.
As previously mentioned on multiple occasions, 1.60000 - 1.62000 has been an area of strong interest. This can be seen clearly across the monthly time frame where a scroll to the left will highlight multiple occasions where this zone has been used for both support and resistance. I believe we are now in a scenario where this zone will act as strong resistance and be the forefront of a shift in the overall long term trend.
My way of trading is to focus on trend reversal setups. EUR/AUD has been in a consistent long term bullish trend and therefore I must notice a shift in the usual higher low followed by higher high pattern. A quick look on the weekly time frame and I can clearly see a new structure forming. It seems price, from its previous high, is now forming an initial lower high on short term resistance of 1.60500. A level that coincides with the previous higher low maintaining a level of accuracy that can be describe as divine intervention....hmm.
This same trend reversal pattern establishes itself across the daily time frame too. Continuing to add to the multiple confluences that form my bearish bias. However, looking into price action in more detail, we come too the 4hr time frame. Look closely at how price has recently been reacting at the key level of 1.6000. The amount of wick rejections of this level when trading below it is insane. The last time we rejected this level as resistance was on the market close on Friday and as initially thought led to a sharp decline in price on Sundays market open.
Following simple market structure, a formation of a new lower high should lead to a new lower low. And looking at the weekly time frame I have spotted my clear cut target for this pair. It sits at what used to be the range support I have mentioned in the past. The round number of 1.57500. This counts for over 200 pips and I do not expect the collapse to come rapidly. In fact I think it could take around 2 weeks before price reaches this level but all my eyes are focused on it.
As previously mentioned on multiple occasions, 1.60000 - 1.62000 has been an area of strong interest. This can be seen clearly across the monthly time frame where a scroll to the left will highlight multiple occasions where this zone has been used for both support and resistance. I believe we are now in a scenario where this zone will act as strong resistance and be the forefront of a shift in the overall long term trend.
My way of trading is to focus on trend reversal setups. EUR/AUD has been in a consistent long term bullish trend and therefore I must notice a shift in the usual higher low followed by higher high pattern. A quick look on the weekly time frame and I can clearly see a new structure forming. It seems price, from its previous high, is now forming an initial lower high on short term resistance of 1.60500. A level that coincides with the previous higher low maintaining a level of accuracy that can be describe as divine intervention....hmm.
This same trend reversal pattern establishes itself across the daily time frame too. Continuing to add to the multiple confluences that form my bearish bias. However, looking into price action in more detail, we come too the 4hr time frame. Look closely at how price has recently been reacting at the key level of 1.6000. The amount of wick rejections of this level when trading below it is insane. The last time we rejected this level as resistance was on the market close on Friday and as initially thought led to a sharp decline in price on Sundays market open.
Following simple market structure, a formation of a new lower high should lead to a new lower low. And looking at the weekly time frame I have spotted my clear cut target for this pair. It sits at what used to be the range support I have mentioned in the past. The round number of 1.57500. This counts for over 200 pips and I do not expect the collapse to come rapidly. In fact I think it could take around 2 weeks before price reaches this level but all my eyes are focused on it.