Starting at the left, we see that price has respected the trend line for the last month. Price began to consolidate and wasn’t able to create lower lows when it reached 75.500.
We see divergence occur on the last lowest low of the trend then a clear break of the trend line.
Price again respected the 75.500 level and formed its first bottom. We just completed the most recent bottom and now we’re are at the most critical part of a reversal pattern, the confirmation. If price can push through the neckline we can see the market cool off and retrace to 38.2% or 61.8% over the next few weeks.
Predictions
Fundamentals: Waiting for 9:30pm news to get a reading on how much of an affect the trade war has had on the Australian economy. Rumors of China banning rare earth metals may instill confidence in investors.
Technicals: Looking for a break and a retest of the neckline. First profits should be secured if price reaches H4 resistance level, 76.364. If price can push past this level the next target will be the 23.6% retracement level. If price can maintain this level, this could turn into a long-term trade but for now, with the all of the indecision and trade talk volatility.
What would make this trade invalid?
Reversal market structure at the neckline on the H1
A break of the current D support 75.500
Updates on trade talks, more precisely a more aggressive approach by the US to ban Chinese imports.
Divergence on the indicator
We see divergence occur on the last lowest low of the trend then a clear break of the trend line.
Price again respected the 75.500 level and formed its first bottom. We just completed the most recent bottom and now we’re are at the most critical part of a reversal pattern, the confirmation. If price can push through the neckline we can see the market cool off and retrace to 38.2% or 61.8% over the next few weeks.
Predictions
Fundamentals: Waiting for 9:30pm news to get a reading on how much of an affect the trade war has had on the Australian economy. Rumors of China banning rare earth metals may instill confidence in investors.
Technicals: Looking for a break and a retest of the neckline. First profits should be secured if price reaches H4 resistance level, 76.364. If price can push past this level the next target will be the 23.6% retracement level. If price can maintain this level, this could turn into a long-term trade but for now, with the all of the indecision and trade talk volatility.
What would make this trade invalid?
Reversal market structure at the neckline on the H1
A break of the current D support 75.500
Updates on trade talks, more precisely a more aggressive approach by the US to ban Chinese imports.
Divergence on the indicator