AUD has fallen for the past few weeks. Time for a reversal. After a pair has a long trend of several hundred pips I look for a point where price will stall or terminate. Counter trend trading is not for the faint hearted. However there is no other way to continually make profits if you cannot master entering both ways short and long. It’s all about waiting for the chart to show you the or tell you the facts. Patience is important you can afford to wait and get in to the trade a bit later.
Evidence for the Long position
The facts to look for a long position on the AUDUSD are;
Let’s look for the evidence;
1. Price has reached at 161.8% extension of the downtrend on the daily chart.
2. A change of trend has occurred on the daily chart – seen by the Higher low after the yearly ATL. I also call this the 1-2-3 pattern. Three clues before you enter.
3. Bulls and bears are waiting on the sidelines for the right time to buy this pair. Buy low sell high.
4. Mean reversion is at play i.e: Price returns to 50% of the decline or rise
My trade plan as follows;
To wait for price to hit the TL then watch for a sign on the 15min a doji candle on the hourly chart signifying and confirming entry and/or reversal pattern higher low and higher high during London open on Tuesday or Wednesday.
Entry price 0.7477 (approximate) order flow and support from previous 10/04/17 and more recent lows 05.02 & 18.05
1st target – 0.7640 (approximate) – Resistance – Scale 30%
2nd target -0.7715 (approximate)- 0.382 retracement & 127% extension & resistance- Scale 30%
Final target – 0.7777 (approximate) – 0.50% retracement & 161.8% extension & resistance. Mean reversion take full profit