- AUD/CAD has fallen below critical daily support that is now expected to act as resistance.
- The move has given rise to a high-probability trade setup to the downside.
In the following top-down analysis, starting with the weekly, the daily and then moving down to the 4-hour chart, a swing trade high-probability setup has been illustrated.
Bears can take advantage of the break below daily support and seek a discount on a pullback to the resistance structure for a 1:3 risk to reward ratio selling AUD/CAD.
Weekly 1,2,3 wave analysis
-637381497591331827.png)
As can be seen, the price has moved in a wave sequence, the third being in mid-flow from which bears can seek to get on board.
Daily 1,2,3 wave analysis
-637381497311623181.png)
The daily chart shows that the price has slipped below the old support structure, prior lows, and on a restest pf the area, fortified by the trendline resistance, bears can seek to enter the third wave at a discount to current spot.
4-hour sell limit
-637381503424634696.png)
On the 4-hour time frame, the structure is clear and a sell limit order can be placed with a stop loss protecting the position against any adverse sharp movements beyond the previous resistance.
A target towards the prior weekly structure offers a 1:3 risk to reward opportunity.
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