Aussie had an excellent rally over the past few weeks. We saw it taking every resistance on the way to close the week above 0.76. This level hasn't been seen in this market for a long time.
At the same time, the current level of 0.76 is a major resistance. It was a strong and responsive support back in 2015. It is likely that this level will be recognised by traders once again.
I remain long term bullish on AUDUSD for time beingbased on Commitments Of Traders analysis but I see a counter trend short opportunity.
Bears could see the current levels of 0.76 as a resistance. The logical target lays around 0.7320, another important support – former resistance.
This scenario presents good short setup with good risk scenario.
Four reasons to short:
0.76 - major resistance - former support
0.76 - WM4 Pivot Point
0.76 - Psych level
Stochastics extreme
Entry
Wait for the price to open on Monday and see how it progresses before London's open.
I would first wait if the price to correct towards 0.76 and see if any pattern is formed to enter shorts.
If the price makes another high, cancel the trade.
Stops above 0.7680
Target 0.7340
Date: 03/21/2016
Pair: AUDUSD
Price: 0.7550
Trade: Sell Stop
Lot Size: 0.03
Stop Loss in Pips: 100
Take profit in pips: 240
Risk of Equity: 2%
ARE THERE MAJOR RISK EVENTS TODAY/THIS WEEK: No
Is the market risk off or on? SP500, DAX, NIKKEI. Are the down or up: Risk Off
Is this trade with the trend?: Reversal
Did I see it yesterday?: Yes
Is this a pullback measured by Fibs?: Yes
Am I buying support?: N/A
Am I selling resistance?: Yes
Is this entered during London's session?: Not sure. Its a pending order
Did the price pulled back from 200MA on 15Min?: Yes
Are stochs extreme on multi charts?: Yes
Where is the price in terms of Pivots Points?: Resistance
Trading in Forex Exchange Market is VERY SPECULATIVE AND HIGHLY RISKY and is not suitable for all members of the general public but only for those investors who: (a) understand and are willing to assume the economic, legal and other risks involved. (b) Taking into account their personal financial circumstances, financial resources, life style and obligations are financially able to assume the loss of their entire investment. (c) Have the knowledge to understand Forex Exchange Market and the underlying assets.
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