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Short

AUDUSD - Still Bearish - Look Past the Candlesticks

FX:AUDUSD   Australian Dollar/U.S. Dollar
308 7 12
Greetings Fellow Traders,

There are many tools available to us traders but most importantly it's crucial that you always keep the bigger picture in mind.

Candlesticks 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
snapshot

I'll agree that without context those candles by themselves do not hint at bears...but Candlesticks alone are not how I trade. For the better part of the last couple of weeks while these candlesticks 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 Bullish 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 bearish strength trend line, the other, is a little more relevant and covers the daily bearish 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 bullish 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 bearish 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.

Feel free to comment/like/follow.
Asif
9 months ago
Excellent idea
+1 Reply
Synapse Asif
9 months ago
Thank you Asif!
Reply
SkyrEk
9 months ago
thanks mate :)
+1 Reply
Synapse SkyrEk
9 months ago
You're very welcome, SkyrEk!
+1 Reply
GoodLuckbabe
9 months ago
Very nice explanation hope we gonna see that move for which we are waiting from last couple of weeks and absolutely if daily close above 0.7200 will give us a sign to rethink about our bearish stance good luck mate keep up your nice and good work cheers
+1 Reply
Synapse GoodLuckbabe
9 months ago
Thanks for the feedback, I appreciate it!
Reply
cashmachine01
9 months ago
Agreed, I have a zone setup below .7250 I have a couple of longer hold short positions testing my patience at the moment. But I am bearish until proven otherwise, like you say a break above .7200
Reply
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