There are many tools available to us traders but most importantly it's crucial that you always keep the bigger picture in mind.
can often be one of those tools, but they, like many things in trading are not indicative of future movements. Correlation is not causation.
I've talked with many traders regarding AUDUSD recent price action the last couple of weeks...the recurring theme is...those daily candles do not hint at bears. Here's a look at that daily chart
I'll agree that without context those candles by themselves do not hint at bears...but alone are not how I trade. For the better part of the last couple of weeks while these have been forming there has been interest in selling and it gets prevented on the daily scale and the end result are these long wicked candles. Is it though? My answer to that is no, not yet. You see the market is trading against and very close to a key technical level, 2 of them actually. One is a long standing weekly strength , the other, is a little more relevant and covers the daily strength from recent weeks. So while we can speculate that the bulls are taking advantage of the market, we've yet to close above those key technical levels on their respective time frames. Until that happens, the bears have a clear and resounding advantage in this scenario.
I've labeled the most recent development and it's how we finished this week off with AUDUSD near .7145 retesting a rather steep previous short term support as resistance. I've labeled it OS=NR (Old Support = New Resistance).
I mention it on my charts - but compare it to something that has happened recently on another pair - If the market was truly on AUDUSD we'd be getting more than ranging price action, we'd actually be trading above .72000 and likely be near .74000 right now. As soon as EURUSD broke 1.0950-1.1050 it found itself in the 1.13's almost immediately.
I will remain on AUDUSD unless a daily close above .72000 is made.
The bears are going to need to secure a 4 hour or better close under .7040 to get additional commitment to move significantly lower.
In any case these strength lines are converging and while the market has been toying with our emotions about where it is headed, it's going to have to make a decision and soon. There is a significant chance it is going to happen the last week of February - and a very small chance that it will be the first thing to happen in March.
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