AUD/USD H4 – Supply might be on the increase – discussion
As the market analysis scenarios are for educational purposes, a previous possible setup will be reviewed as part of the learning process.
On 8 November a possible scenario was identified in the AUD/USD currency pair, on the H4 time frame, where downward momentum was building with a possible new downtrend in progress.
Later in the same day, the price broke through the critical support level at 0.68614 and a short position was engaged with possible targets envisioned as well as a possible capital protection level.
Currently the market is hovering near the entry level as buyers try to decide whether or not they want to enter the market in significant numbers or not. Since this is a major currency pair, the volumes are large and no one single market player is big enough to move the market. This is very important to consider BEFORE deciding to trade in a certain instrument.
If buyers do enter in significant numbers and the resistance level at 0.69135 is broken, the short trade must be liquidated to protect trading capital. It will still however be a good trade as we waited for the early stage of a new trend, took a calculated risk and allowed the market room to breathe.
If sellers continue to dominate the market and the 161.80% target is reached, partial profit can be taken to lessen the risk and decrease mental pressure, making it easy to let the trade alone and allow the market to either continue to the second and possibly the third target.
If at any stages the downtrend (consecutively lower bottoms and tops) stops, then the rest of the open profit can be taken and new scenarios be considered.
Disclaimer:
This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
On 8 November a possible scenario was identified in the AUD/USD currency pair, on the H4 time frame, where downward momentum was building with a possible new downtrend in progress.
Later in the same day, the price broke through the critical support level at 0.68614 and a short position was engaged with possible targets envisioned as well as a possible capital protection level.
Currently the market is hovering near the entry level as buyers try to decide whether or not they want to enter the market in significant numbers or not. Since this is a major currency pair, the volumes are large and no one single market player is big enough to move the market. This is very important to consider BEFORE deciding to trade in a certain instrument.
If buyers do enter in significant numbers and the resistance level at 0.69135 is broken, the short trade must be liquidated to protect trading capital. It will still however be a good trade as we waited for the early stage of a new trend, took a calculated risk and allowed the market room to breathe.
If sellers continue to dominate the market and the 161.80% target is reached, partial profit can be taken to lessen the risk and decrease mental pressure, making it easy to let the trade alone and allow the market to either continue to the second and possibly the third target.
If at any stages the downtrend (consecutively lower bottoms and tops) stops, then the rest of the open profit can be taken and new scenarios be considered.
Disclaimer:
This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.