After posting an impressive 600+pip gain for the year, the pair has posted its first 4 out of 5 day bear close along with its first touch of the daily 20ema in over a month. What should be noticed is how price rejected off the daily 20ema almost to the pip, then closed up 60+pips off the lows. This makes the rejection off the 20ema larger in price action then the selling in the body as can be seen in the chart below.
Looking at the 4hr chart below, one can see a very long pinbar which created a false break of the prior swing lows and gravity point we discussed yesterday. Many of our price action traders got in on this short hitting the target making close to a 100pips on the day so hopefully you profited from this as well.
What should be noted now is the pinbar false break likely trapped some traders on the break of the lows while also likely means medium term traders bought off the daily 20ema. This offers traders a good play by taking a small pullback into the 1.0660 – 1.0640 region with stops below the pinbar low, while targeting minimally the SH (Swing High) which offers a good 2.5:1 R:R play or the MSH (Major Swing High) which offers more than a 3.25:1 R:R play for the bulls. Bears can wait for pullbacks to the MSH with tight stops above targeting the SH labeled in the chart and the daily 20ema which offers a fantastic 6.25:1 R:R play.
For those of you looking to trade intraday price action, visit our Advanced Price Action Course where we teach rule-based systems for trading Price Action.
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AUD/USD: Possible Breakdown
Published 02/15/2012, 01:31 AM
Updated 05/14/2017, 06:45 AM
AUD/USD: Possible Breakdown
AUD/USD – Possible Breakdown
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