as you know we are in a short trade in the AUD/USD. Recently we witnessed the price stopping and attempting a brief bounce.
This is going to be a dead cat bounce as there is no support below current price from professional traders and program trading, in my opinion.
When we look at the 4-hour chart below, which is the chart I focus on today:
we can see that price has a strong area of resistance starting back at 0.9343. I do not believe we are going to get there anyway. The reason is that the sequence of measured moves upwards on the 4-hour timeframe has already failed.
This morning we witnessed price bouncing off the 0.9260 area first, but the next 4-hour bars actually pierced the 0.9252 level on the upside. That is an indication of weakness and this “busted setup” could actually bring prices to first target at 0.9310 area, just to briskly reverse.
This is the scenario I am looking at, with an entry in the 0.9310 and a stop above 0.9372. With a 62 pips risk (always mind risks first), this would be a R/R=4 trade to the target level down at 0.9060 area.
Let’s see what this market brings us.
.I discussed some of the concepts I used in this review in my webinar at FXStreet titled: “FibStalking: A Timing Technique to Test Support and Resistance” webinar. As soon as I will get the link to the recording I will share it with you.
Have a great long weekend.